Oil prices are on fire with war indicators!

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Oil price indices and oil barrels around the world are inflamed, due to fear and expectations of the outbreak of war anywhere in the world, from the Arabian Gulf to Europe, in light of the war between Russia and Ukraine, as well as the fear of a coup in one of the South American countries.

An example of this is the almost absolute control, by the US administration, of Venezuelan oil wells and fields, with full control over them, without accounting or discussion about production quantities and how to deal with the buying and selling mechanism between the US government and Venezuela.

ExxonMobil, one of the largest oil companies, has so far refrained from entering or dealing with the Venezuelan oil sector, for fear of the future and fear of judicial prosecutions and financial compensation that Venezuelan governments may demand later.

All oil price indices record levels approaching $100 per barrel, and even exceed $114 for Russian crude oil, which is currently considered one of the most active and traded types of oil.

Most importantly, the US administration has agreed to import Russian oil in large quantities, despite its strong opposition, at the same time, to the Ukrainian attacks on Russian oil facilities, the most important of which are refineries, which may cause a crisis in oil derivatives in Europe, as a result of the lack of sufficient quantities to meet global demand, especially during the peak demand for oil in the winter, and the need for heating fuel.

The United States of America continues to import petroleum derivatives from Russia, which has led to a rise in the price of the US oil index to above $100 per barrel, and this may continue until the end of the winter season.

These rises in oil prices will affect the upcoming US results next November, despite the US administration’s promises to reduce oil prices. At a time when the administration announces its desire to reduce prices, the opposite is happening, as the price of gasoline has risen in the United States, currently reaching $1.23 per liter, or $4.37 per gallon.

This will cause discomfort and dissatisfaction among the American consumer, and thus may affect the results of the upcoming American elections in November, especially since automobile gasoline prices are considered one of the most important factors influencing the attitudes of the American voter, especially during the election period.

This may lead to the Republican Party losing its current majority in the US Congress.

Most importantly, prices are not stable at all, especially with the continuous verbal threats to close the Strait of Hormuz, and the trend towards imports from various regions of the world, in addition to the increase in strategic reserves, which may contribute to the rise in oil prices.

For this reason, the US administration may move towards importing Russian oil without reservation, for fear of sharp rises in gasoline prices, which is the true indicator of the American voter’s attitudes, and what may result from this turning voters towards the other party, and the Republican Party losing its majority in Congress. This is the source of concern, in light of the current administration’s attempt to maintain the majority to ensure the continuation of its policies during the coming periods.

What matters to us, the 12 OPEC countries, is maintaining current production rates, which amount to about 20 million barrels per day.

This quantity does not include Russia’s production, which currently amounts to between 9 million and 9.5 million barrels per day, as Russia currently considers itself close to OPEC, and is committed to production quotas, until further notice.

It is difficult to expect calm to return to oil prices, especially with the advent of winter and the loss of a large portion of oil derivatives production as a result of the damage to Russian refineries. The US administration is also angry with Ukraine because of its attacks on the Russian refining and oil sector, which reinforces expectations of new rises in oil prices.

It seems that the US administration has almost failed to take any effective measures to calm oil prices, except for increasing the import of Russian oil to the United States.

The question remains: How will Europe be able to secure its needs for oil derivatives?

There are fears of the continuation of repeated Ukrainian attacks on Russian refineries, or what remains of them, as received estimates indicate that most of the 32 Russian refineries and oil facilities have been almost destroyed, and only five facilities remain.

This may lead to a shortage of supplies and the unavailability of sufficient quantities of heating fuel, in light of the scarcity of petroleum derivatives.

This will be costly and burdensome for the European consumer until the end of the first quarter of next year, as he will face a sharp rise in the prices of petroleum derivatives, in addition to rising import costs from neighboring countries, which will have a strong impact on the prices borne by the final consumer.

We hope that the coming winter will not be harsh and excessive in its severity for Europe, and that its cost will not be heavy on its people and the pockets of its citizens.