Tensions in the Middle East support oil prices, despite increased supplies from the Russian Federation

Against the background of continued hostilities between Israel and Hamas and new Houthi attacks on commercial vessels in the Red Sea, oil prices rose to a two-week high, not reacting to data on increased supplies from the Russian Federation.

April Brent crude futures rose 2.4% this week to $83.6/barrel (+1.5% for the week, +2.2% for the month), while Russian Urals crude for the time fell by 1% to $74.3/barrel (+2.3% for the month). Russian oil prices exceed the US level of $60/barrel, which indicates the ineffectiveness of Western sanctions against the Russian Federation.

According to Bloomberg, oil exports from the Russian Federation for February 19-25 increased compared to the previous week by 365,000 barrels/day to 3.5 million barrels/day, which was 215,000 barrels/day higher than the rate agreed with OPEC+. This means that the authorities of the Russian Federation are increasing supplies to obtain income for the continuation of the war, taking advantage of the rise in world prices as a result of Houthi attacks on commercial ships, including oil tankers.

The value of Russian oil exported for February 1-22 reached a 3-week high of $1.73 billion, compared with $1.55 billion in the previous week. And the average income increased by $115 million in 4 weeks.

Against the backdrop of sanctions, the Russian Federation slightly reduced oil supplies to India, diverting several vessels to China. In addition, 14 batches of oil with a volume of 10 million barrels still remain on the ships. Last week, the Russian Federation loaded almost 1.45 million barrels/day onto tankers bound for China.

In January, India increased its consumption of petroleum products to a 9-month high of 20 million tons, which is 8.3% higher than in January 2023.

According to Vortexa, during February 17-23, the volume of crude oil stored on tankers that remained at the docks for at least a week decreased by 7.5% to a 3-year low of 66.43 million barrels.

Analysts expect that in today's EIA report data on crude oil reserves in the US will be increased by 3.7 million barrels, which will slightly lower the quotation.

The current increase in the price of oil will support the quotation of vegetable oils and raw materials in the near future.