Russian, US Crude Supply Disruptions Boost Oil Prices

Prices got support after Ukrainian drones attacked a pumping station in Russia on the Caspian Pipeline Consortium pipeline, which moves crude from Kazakhstan to world markets.

According to Russian Deputy Prime Minister Alexander Novak, oil flows through the pipeline were reduced by 30-40 per cent on Tuesday, said.

A 30 per cent cut would translate to a 380,000 barrels per day reduction in oil supply.

There was another supply shock on Tuesday as Russia’s Black Sea port of Novorossiisk suspended loadings due to a storm.

Severe storms in the Black Sea region regularly disrupt up to two million barrels per day of oil exports from Kazakhstan and Russia.

Also, in the US, the North Dakota Pipeline Authority estimated that production in the country’s third largest producing state would be down by as much as 150,000 barrels per day.

Meanwhile, talks to end the war in Ukraine capped gains as this could boost supply from Russia.

US and Russian delegates held a lengthy meeting in Saudi Arabia to discuss ways to halt the war which began in February 2022, although Ukraine was absent.

Market analysts noted that a deal would lower oil prices as sanctions would be lifted, allowing for Russian flows.

There are also indications that US crude oil and gasoline stockpiles likely rose last week. Data from the American Petroleum Industry (API) and the US Energy Information Administration (EIA) were delayed a day due to a Monday holiday.

Meanwhile, traders are also waiting for clarity on whether the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) will proceed with plans to boost oil supply from April, or delay that to a later date.