The oil crisis is not over the horizon

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to Kommersant FM on the timing of the overflow of oil storage facilities in the Persian Gulf and the shock on the global LNG market.

There are about two weeks left before the uncontrolled rise in oil prices — then the storage facilities of local exporters may be overflowed and they will suspend production, Alexey Belogoryev says: "Iraq was the first to start reducing production, reducing it by 1.5 million barrels per day from March 3, and plans to cut it by the same amount. Kuwait will have similar problems starting on March 15, and Qatar and the UAE will have similar problems a week later. Only Saudi Arabia retains a margin of safety. The United States has about two weeks left to either end the conflict or limit Iran's ability to attack ships — whether this will succeed is a big question.

The situation on the LNG market is even more serious: there are practically no reserves, prices are already rising, despite the end of the heating season. Qatar has warned of a fourfold increase in the cost. An additional shock was caused by the sinking of a Russian gas carrier on March 3, the first successful military attack of this type. In the long term, this will increase freight rates and the cost of building ships: they will have to be strengthened, actually turning into floating fortresses. This is an epochal change for the LNG market."