There are no more free volumes of oil — the price of oil will go up

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented to the Neft and Capital Internet portal on the non-renewal of US permits to purchase oil from Russia and Iran.

The United States imposed a blockade at the exit from the Strait of Hormuz and did not extend the exemption from sanctions restrictions on barrels from Russia and Iran. Are they hoping to find additional oil volumes somewhere to saturate the global market?

AG: The United States is not keeping up with developments in the energy markets, and the country's political moves are chaotic. In this situation, it is impossible to make forecasts on the situation on the global oil market.

The current status of the Strait of Hormuz is unknown: no one knows whether negotiations between Washington and Tehran will resume, whether normal navigation in and out of the Persian Gulf will begin, including traders. Some sellers take risks and let ships through the strait, while others wait. The prices of raw materials are in a state of complete misunderstanding of the situation.

How do Trump's statements about the imminent resolution of the conflict in the Middle East affect current oil supplies and prices?

AG: In the futures market for physical supplies, oil is trading significantly more expensive than $100 per barrel. For example, on April 14, Urals shipments were sold on the spot at a premium to Brent of $5-6, and the price of the North Sea variety was at $123 per barrel.

At the same time, investors are still optimistic in the market of expectations (futures), they believe that shipping through Hormuz will fully resume by May, therefore, Brent quotes remain below $100 per barrel in the paper oil market.

How will the extension absence of the general license of the US Treasury affect Russian oil exports?

AG: As for Russia, during the period of the general license of the US Treasury to lift restrictions, a large number of countries negotiated the purchase of Russian barrels, including the Philippines, Thailand, Bangladesh, Vietnam, etc. Let's see if they decide to purchase oil from Moscow under the US sanctions restrictions. It's still questionable.

The same goes for India. It increased oil purchases from Russian companies in March, primarily due to the volumes that were on the water. But for April, it also contracted the purchase of more than 2 million b/d from Russia, although in February the country bought only 1.2 million b/d. If these contracts are executed, little will change for Russia.