The News
Russia’s commercial oil revenues climbed by $900 million in January despite a fresh round of Western-imposed sanctions at the start of the year, according to an International Energy Agency report released Thursday. The Paris-based agency also projected a slight increase in global oil demand amid a narrowing surplus and falling levels of production, writing that sanctions on Russia and its fellow OPEC+ member Iran “have yet to materially impact global oil supply.”
Oil prices fell more than 1% Thursday, a day after after US President Donald Trump and Russia’s Vladimir Putin discussed a potential peace deal for the Ukraine war. A possible ceasefire in Ukraine could be bearish for oil prices, an analyst told MarketWatch, if Trump eases sanctions on Russian energy: Geopolitical stability could possibly “extinguish the still simmering ‘fear bid’ in the oil market.”
While China continues to be a principal driver of worldwide demand, the country’s faltering economic growth suggests that it may be past its peak levels of consumption, the IEA said. The report also pointed to record levels of Chinese coal production and consumption, in defiance of the IEA’s own predictions.
The IEA report comes a day after OPEC+ forecast an even greater increase in global demand on the back of strong Asian demand. The OPEC+ report also cited high levels of uncertainty in the market as a result of Trump’s pledge to dramatically increase domestic oil production while levying broad tariffs on US trading partners, though it does not expect US policy to seriously impact the global outlook.