Link: https://iz.ru/2057835/daniil-sechkin/cenovoj-zalog-strany-azii-ne-spravlyayutsya-s-toplivnym-krizisom

Asia as a region has been hit especially hard by the current rise in oil prices. Japan is running out of stocks, Indonesia plans to expand subsidies, and other countries are struggling to keep fuel prices at bay. Meanwhile, Washington is considering the possibility of softening sanctions on Russian oil. Experts believe that a lifting of restrictions could influence the situation to some extent but caution that prices should not be expected to change much, Izvestia writes.

As much as 60% of Asian oil imports traditionally come from the Middle East, so companies in Singapore, Japan, India, and South Korea are already forced to reduce production and declare force majeure due to logistics disruptions.

India is not the only country asking for an easing of sanctions. Bangladesh has officially requested a temporary US waiver to purchase Russian oil. It’s gasoline, diesel and kerosene rather than crude oil prices that a partial lifting of sanctions would impact the most, Dmitry Kasatkin, managing partner at Kasatkin Consulting, noted. It would be easier to transport them, so the deficit would fall and prices could go down a bit.

An increase in Russian oil purchases will have a positive effect on Russian exporters, both because global prices are high and discounts are likely to decline, Dmitry Skryabin, portfolio manager at the Alpha Capital asset management company, emphasized. In general, rising commodity prices are supporting the Russian economy as export earnings grow, budget revenues rise, and the trade balance improves.

Meanwhile, Russian oil exports alone cannot stabilize the global market, with nearly 20 million barrels per day of supplies trapped in the Persian Gulf. Even if the active phase of the conflict ends soon, the likelihood of another round of tensions will keep oil prices above fundamental levels for several quarters, Skryabin stressed. In today’s situation, geopolitics remains the key driver of prices.