Oil Updates: Crude Drops Amid Great Optimism; Russian oil shipped to Asia on Chinese supertankers

RIYADH: Oil prices fell in early Asian trading on Monday but remained near the highest levels since the start of the year on optimism that China’s reopening will boost demand for fuel in the world’s top crude importer .

Brent crude fell 61 cents, or 0.72 percent, to $84.67 a barrel as of 08:15 a.m. Saudi time, while US West Texas Intermediate crude.

Both contracts rose more than 8 percent last week, the biggest weekly gain since October, after China’s crude imports rose 4 percent on-year in December as Lunar New Year travel brightened the outlook for fuels for transportation.

Climate Activists Protest Great Oil Sequestration Debate Ahead of WEF

Climate activists protested in Davos on Sunday against the role of big oil companies at this week’s World Economic Forum, saying they were hijacking the climate debate.

Major energy companies including BP, Chevron and Saudi Aramco are among the 1,500 business leaders gathering for the annual meeting at the Swiss resort, where global threats including climate change are on the agenda.

“We demand concrete and real climate action,” said Nicolas Siegrist, the 26-year-old protest organizer who also heads the Young Socialists party in Switzerland.

The annual meeting of world business and political leaders officially opens in Davos on Monday.

“They will be in the same room with state leaders and defend their interests,” Siegrist said of the participation of energy companies at the World Economic Forum meeting.

The oil and gas industry has said it must be part of the energy transition, as fossil fuels will continue to play a significant role in the global energy mix as countries shift to low-carbon economies.

More than a hundred protesters gathered in a snowy Davos square chanted “change your diet for the climate, eat the rich”, while some booed oil firms quoted during a speech.

“I know some of the companies are involved in alternatives, but I think governments with their subsidies have to skew the field in favor of alternative energy,” Heather Smith, member of the 99 Percent organization.

Smith was holding a sign reading “Stop Rosebank”, a North Sea oil and gas field for which he is campaigning to stop plans.

Rising interest rates have made it harder for renewable energy developments to attract financing, giving deep-pocketed traditional players a competitive edge.

“There is still too much money to be made from fossil fuel investments,” he added.

Russian oil shipped to Asia on Chinese supertankers amid ship shortage

At least four Chinese-owned supertankers are shipping Russian Ural crude to China, according to trade sources and monitoring data, as Moscow searches for vessels to export after a Group of Seven oil price cap restricted use. services and western cargo insurance.

China, the world’s top oil importer, has continued to buy Russian oil despite Western sanctions after Russian President Vladimir Putin and Chinese leader Xi Jinping launched what they called a no-holds-barred partnership ahead of the war in Ukraine.

The sources said a fifth supertanker, or very large crude carrier, was sending crude to India, which like China has continued to buy Russian oil sold at a discount as many Western buyers turn to other suppliers.

The five shipments were scheduled between December 22 and January 23, according to the sources and Eikon’s ship tracking data.

The G7 price cap introduced in December allows countries outside the EU to import Russian oil transported by sea, but prohibits transport, insurance and reinsurance companies from handling cargoes of Russian crude unless they sell below the price cap. 60 dollars.

“With Ural prices well below the price cap, the business of buying and trading Urals is essentially legitimate,” said an executive from a Chinese company involved in the shipments.

As the United States and its allies tried to stifle Moscow’s energy revenues to limit its ability to finance the Ukraine war, Russia swiftly diverted Europe’s oil exports last year, mainly to Asia.

Longer voyages, deep discounts and record freight rates hurt earnings, but the use of supertankers on Asian routes can now lower shipping costs.

Russia’s energy and transport ministries declined to comment. China’s foreign ministry did not respond to a request for comment, though Beijing previously called Western sanctions against Russia illegal.

India’s Oil Minister Hardeep Singh Puri told a news conference on Thursday that India would buy oil wherever it could get the lowest price.

Industry sources say Indian refiners are securing a $15-$20 per barrel discount on delivered Russian oil compared to Brent.

(With information from Reuters)