Oil prices jump following Russia’s biggest production decline

Oil prices rose on April 13, after concerns that declining output in sanctions-hit Russia may affect supply, following the Russian announcement that peace negotiations to stop its invasion of Ukraine had reached a stalemate.

Consequently, Brent crude futures were up 59 cents, or 0.6 per cent, to $105.23 a barrel, while West Texas Intermediate (WTI) crude futures were up 60 cents, or 0.6 per cent, to $101.20 a barrel. The previous session saw both contracts rise by more than 6%.

On Tuesday, Russian President Vladimir Putin criticised Ukraine for the termination of peace talks and stated that Russia will not abandon its “special operation” to disarm its western neighbor.

He stated that peace talks with Ukraine are at a stalemate, but that the seven-week operation is going as planned. In a note, ANZ oil experts stated that this raises the threat of the prolonged potential of supply disruptions in the oil sector.

According to those familiar with the figures, Russian oil and gas extract output declined below 10 million BPD on April 11, the biggest drop since July 2020, as a result of sanctions imposed by numerous nations after Russia invaded Ukraine and logistical difficulties, which hindered business.

This is quite serious as Russia is the world’s second-largest oil exporter.

According to reports, Russia’s Energy Minister Nikolai Shulginov said late Tuesday that the government was willing to sell oil and oil products to “friendly countries in whatever price range,” adding that Moscow was focused on guaranteeing the oil sector’s proper functioning.

Read more: International oil prices declined by 4%, crashing below $100 per barrel

Meanwhile, indications of a partial relaxation of some of China’s strict COVID-19 restrictions have fueled optimistic sentiment between some market players this week.