Oil Markets Remain Down on Russian Shortfall Coverage

Crude markets remain down today on news that OPEC members may step in to cover Russia’s production shortfall created by sanctions:

• Russian crude output is down around 1mn bpd because of sanctions limiting export options.
• The Kremlin keeps reiterating that it can redirect flows to other countries, but the market remains sceptical with only India and China so far stepping forward to meaningfully soak up any of the excess supply.
• Crude prices had been developing over the last week on China’s reemergence from strict lockdowns as well as a lack of any direction from any nation to boost supplies and the EU oil ban against Russia creating further disruption.
• The Wall Street Journal reported on Tuesday that some OPEC members were considering suspending Russia from the agreed production plan, to allow other producers to pump significantly more crude.
• OPEC+ will announce their production plans after this afternoon’s meeting which starts a 14.30 Vienna time. It remains to be seen whether any announcement on Russian output plans is made.
• Brent AUG 22 down -2.6% at 113.29$/bbl
• WTI JUL 22 down -2.6% at 112.23$/bbl
• Brent AUG 22-SEP 22 down -0.23$/bbl at 2.5$/bbl
• Brent DEC 22-DEC 23 down -1.37$/bbl at 13.41$/bbl