Russia's crude oil exports are limited, and Saudi Arabia has raised the price of crude oil, causing oil distribution to approach the $140 per barrel mark.

Crude oil futures have regained momentum, approaching a 14 year high.

On the morning of March 7th, Brent crude oil futures prices sharply increased by $20 per barrel, reaching a high of $139.1 per barrel. WTI crude oil futures prices reached a high of $130.5 per barrel, and both major crude oil futures prices hit their highest levels since 2008.

In 2008, the highest prices of WTI and Brent crude oil both exceeded $140 per barrel, approaching $150 per barrel, setting an all-time high.

Market analysis indicates that the energy sanctions imposed on Russia, a major oil producing country, will create a huge gap in global energy supply. However, Iran's crude oil exports have not yet been lifted, and in the face of a relative shortage of idle global crude oil production capacity, an increase in oil and gas prices will be inevitable.

International oil prices have experienced a significant increase again

On the afternoon of March 7th Beijing time, WTI crude oil futures prices fell back to around $125 per barrel, while Brent crude oil prices fell back to around $128 per barrel. Even at this level, the increase in oil prices from the beginning of the year has exceeded 50%.

On the surface of the news, the US government has stated that it has discussed with its European allies a plan to ban oil imports from Russia, which has brought new stimulus to the already tense crude oil market. Prior to this, the United States and its European allies imposed multiple sanctions on Russia, but did not prohibit oil and gas transactions with Russia.

Since the end of last year, global crude oil demand has continued to grow, but OPEC+organizations continue to maintain a slow pace of production increase, causing the gap in the crude oil market to increase instead of decrease; Recently, Russia has faced multiple sanctions, causing difficulties in its energy exports and exacerbating the tense situation in the global crude oil market.

In response to the sustained rise in oil prices, the International Energy Agency (IEA) and several crude oil consuming countries such as the United States jointly released strategic reserves of crude oil. However, a total of 60 million barrels did not have a significant impact on the market, and the rise in oil prices continued.

Mike Muller, Asia head of commodity operator Vitol Group, pointed out that the global reserve crude oil production capacity and crude oil inventory are currently in a state of shortage, and the high oil prices caused by the geopolitical crisis will cause damage to global crude oil demand.

Xi Jiarui, an analyst at Jinlian Chuang Crude Oil, said that the recent panic in the crude oil market has continued to grow, and the risk aversion has led to a continuous retreat of funds and a shift towards the gold market for risk aversion and appreciation. From the perspective of funds left on the market, supported by geopolitical factors, short positions retreated rapidly while long positions increased significantly, indicating a high bullish sentiment in the market.

As of the week ending March 1st, the total position of WTI crude oil futures has maintained a significant decline for three consecutive weeks, while short positions have declined for five consecutive weeks, while long and net positions have rebounded.

Natural gas prices in Europe have once again skyrocketed. On March 7th, the Dutch TTF benchmark natural gas futures, which serve as a barometer of European natural gas prices, climbed to a new historical high of 345 euros per megawatt hour. In the past two years, TTF benchmark natural gas futures prices have mostly remained below 20 euros per megawatt hour.

Xi Jiarui pointed out that recent geopolitical conflicts are increasing global economic risks, and the rise in prices of commodities such as crude oil will further exacerbate global inflationary pressures.

Russian crude oil exports affect global markets

As one of the world's largest producers of crude oil and natural gas, Russia's crude oil exports are facing numerous obstacles, which further raises concerns in the international market about the interruption of crude oil supply.

Recently, the main export crude oil type of Russia, Ural crude oil, has continued to lower the spot Brent discount, and its sales in the international market have repeatedly suffered setbacks.

Although European and American countries have not directly sanctioned Russia's energy exports, financial means and asset freezes have also affected the country's energy export transactions. Xi Jiarui introduced that recently, Russian energy exports have encountered difficulties in payment and ship supply. Even if Russian oil prices are far below the benchmark Brent crude oil price, it is difficult to trade, and market concerns about crude oil supply interruptions are constantly escalating.

As of now, several international energy giants, including British Petroleum Corporation (BP), Norwegian National Petroleum Corporation, Shell, and ExxonMobil, have announced their intention to withdraw from project investments in Russia. Total Energy has also stated that it will no longer provide funding for the development of new projects in Russia.

Discounted Ural crude oil attracts European oil giants to purchase. According to data released by S&P Global Procter&Gamble, Shell recently purchased a batch of Ural crude oil shipments, with a discount of $28.5 per barrel for spot Brent.

Shell stated that this batch of Russian crude oil was purchased by its refineries and chemical plants to continue production and ensure the supply of basic fuels and products.

On the other hand, with the rise of international oil prices, Saudi Arabian National Oil Company (Saudi Aramco) has recently raised its export crude oil prices. Among them, the price of Arab light crude oil sent to Asia in April was increased by $2.15 per barrel, while the price of crude oil sent to the Americas and Europe was increased by $1 and $1.7 per barrel, respectively.

Pan Xiang, a researcher at Huatai Futures, pointed out that the return of Iranian crude oil to the market is the most effective way to cool the current oil market, with a recovery space of 1.5 million barrels per day for oil production and 2 million barrels per day for exports; If Iran's crude oil sanctions can be successfully lifted, it will have a significant moderating effect on oil prices.

At present, there have been continuous reports of progress in nuclear negotiations between Iran and the United States, but it is still unknown when Iranian crude oil will be released for export. Even if Iran's crude oil is finally released, it will take several months for the country to achieve a significant increase in crude oil exports.

With the rise of international oil prices, the stocks of major oil and gas producers continue to rise. As of the afternoon close on March 7th, Hong Kong stock China Petroleum (00857. HK) rose 4.44% to HKD 4.47 per share, setting a new high in over two years. The stock price of China National Offshore Oil Corporation (0883. HK) rose to HKD 10.66 per share, up over 35% in the past six months.

The stock price of Saudi Aramco, listed on the Riyadh Stock Exchange in Saudi Arabia, rose as high as 45.9 Saudi Riyals per share, breaking a new high since its listing and rising nearly 30% in the past six months. ExxonMobil's stock price rose to $84.09 per share, an 11% increase from the low point on February 24th; Chevron's stock price rose to $158.65 per share, up nearly 15% in the past month.