The war in Ukraine and fears over raw material supplies propelled oil prices to their highest in nearly a decade on Wednesday, while natural gas and aluminum hit new records.
The surge in black gold prices started again after the decision of the OPEC + exporting countries, led by Saudi Arabia and Russia, not to increase their production more than expected, despite the ascent prices, which is fueling galloping inflation in many countries.
U.S. WTI was trading at $110.95, up 7.29% around 2:20 p.m. GMT (7:20 a.m. EST) after climbing as high as $112.51, a record high since 2013. the North Sea gained 6.50% after hitting $113.94, its highest since 2014.
Natural gas was also driven higher, with the Dutch TTF soaring 36.27% to 168.77 euros per megawhatth hour (MWh), after hitting 194.715 euros, an all-time high.
British gas, for its part, was close to its historic record of last December.
“The decision was expected and will do nothing to allay fears over the supply shock caused by sanctions on Russia because demand for oil is growing rapidly and OPEC is already unable to meet its own production quotas in several countries,” says Tamas Varga of PVM.
The invasion of Ukraine by Vladimir Putin’s Russia has led the European Union and the United States in the lead to impose strong sanctions on Moscow, fueling fears that Russian energy exports could be cut off.
Especially since, notes the firm Energy Aspects on Twitter, most “European oil majors do not touch Russian oil and only a few European refiners and brokers”, for fear of being overtaken by sanctions.
Not to mention the increase in freight rates and war-related insurance premiums, which further complicate transactions, he adds.
Russia is the second largest exporter of crude oil in the world and accounts for more than 40% of the European Union’s annual natural gas imports.
“The war in Ukraine is leading to a sharp reduction in energy exports from Russia, even if these are exempt from sanctions” for the moment, observes Bjarne Schieldrop, an analyst at Seb.
“Carriers refrain from taking Russian energy shipments for fear of possible sanctions and reputational risks. »
“The risk now is that the West will come under increasing pressure to sanction Russian oil and gas exports,” said Neil Wilson, analyst at Markets.com.
The EU has disconnected seven Russian banks from the Swift international financial system, but has so far taken care to spare two large financial establishments closely linked to the hydrocarbon sector.
The Russian-Ukrainian dispute came at a time when crude prices were already climbing sharply due to insufficient supply and a strong recovery in demand around the world caused by the lifting, in many many countries, health restrictions imposed to fight against the Covid-19 pandemic.
Tuesday’s announcement by the International Energy Agency that 60 million barrels from its member countries’ reserves – half of which will be released by the United States – have been brought to market has done nothing to calm prices down. .
“Unless there is geopolitical appeasement […] we could see a continuation of this trend” with “domino effects on most types of assets and on consumer prices”, warns Walid Koudmani, of XTB.
mad dash
Industrial metals were already caught up in the mad rush, with “supply disruptions from Russia becoming increasingly likely,” said Daniel Briesemann of Commerzbank.
Danish shipping giant Maersk announced on Tuesday the suspension of new orders from and to Russian ports, excluding food, medical and humanitarian goods, due to international sanctions.
“If other shipping companies follow this example, it will become increasingly difficult to export materials from Russia,” the analyst continues.
The ton of aluminum reached 3,597 dollars on Wednesday on the London base metals market (London Metal Exchange, LME), a new historic high, when nickel broke a new record since 2011 at 26,505 dollars per ton.
In 2021, Russia was the third largest aluminum producer in the world after China and India, according to data from the World bureau of metal statistics, and exports a large part of its production to Turkey, Japan, China, the United States and the European Union.