Thursday saw a surge in crude oil prices, driven by global economic uncertainties due to ongoing conflicts. Despite some easing of concerns about Red Sea shipping disruptions, tensions persist in the Middle East, supporting oil prices.
In the Comex division of IC Exchange in London, Brent crude, the international benchmark, rose 0.1% to $79.75 per barrel. Meanwhile, WTI prices in the New York Mercantile Exchange’s Comex division dipped slightly to $74.06 per barrel.
Major geopolitical events, such as the Russia-Ukraine and Israel-Hamas conflicts, have intensified oil diplomacy among key economies: the United States, China, Russia, and India. Facing Western sanctions, Russia has shifted fuel exports to China and India, reducing its European market share.
China has become a pivotal player, with 45-50% of its oil imports now sourced from Russia, surpassing Saudi Arabia as its primary supplier. India, previously a minor buyer, now obtains nearly 40% of its oil from Russia.
To counter sanctions, Russia has expanded its oil exports, reportedly refining Russian crude in India and selling it to European customers through alternative routes. Moscow aims to explore new markets for natural gas and oil exports, expecting significant revenue despite sanctions.
While major shipping companies, including Maersk, have resumed Red Sea operations, ongoing Middle East tensions, along with Iran’s involvement, add complexity to the oil supply landscape.
Russian President Vladimir Putin expressed a strengthening of ties with India during a meeting with Indian Foreign Minister S. Jaishankar. As global uncertainties persist, geopolitical events continue to influence global oil dynamics, underscoring the interconnectedness of economic and diplomatic factors.