Global oil prices have fallen: reasons for the decline
18 March 10:12
Global oil prices fell after a sharp rise the previous day amid reports of a possible resumption of exports from Iraq via the port of Ceyhan, which could increase supply in the market.
This was reported by Reuters, according to [Kommersant].
Global oil prices fell
After rising by more than 3% the previous day, global oil prices began to decline on Wednesday. Brent futures fell by $2.26 (2.19%) to $101.16 per barrel. U.S. West Texas Intermediate crude lost $2.99 (3.11%) and dropped to $93.22. Pressure on the market was caused by news of a possible resumption of Iraqi oil exports through the port of Ceyhan. Iraqi Oil Minister Hayan Abdel-Ghani stated that shipment volumes would reach at least 100,000 barrels per day.
Analysts note that even a limited increase in supply has partially calmed the market and led to a price correction, although the overall level of around $100 per barrel remains.
On Geopolitics and Oil
At the same time, geopolitical tensions continue to drive the dynamics of the oil market. Due to the conflict in the Strait of Hormuz region, through which about 20% of the world’s oil is transported, production at Iraq’s southern fields has fallen by 70%—to 1.3 million barrels per day.
The situation is being exacerbated by developments surrounding Iran: Tehran has confirmed the death of senior official Ali Larijani as a result of an Israeli strike, while the country’s new leadership refuses to de-escalate. The U.S., in turn, has struck Iranian targets near the strait, citing a threat to shipping.
Despite this, some experts see the possibility of a quicker resolution to the conflict. An additional factor putting pressure on prices was the rise in U.S. oil inventories: according to API data, they increased by 6.56 million barrels, significantly exceeding market expectations.
Impact on Ukraine
We should add that Ukraine’s fuel market is entering a new phase of price increases. Due to the surge in global oil prices and the frenzy in the autogas market, wholesale prices are rising rapidly, and gas station chains have already begun passing this on to consumers. Experts warn that diesel could quickly approach 85 UAH per liter.
