April 1st, 2022
Two months ago, I spoke of the tightness of the market, and how susceptible the price was to a potential attack in Iran, Saudi or the Middle east.
What I never saw was a Russian invasion of Ukraine. However, the fundamentals simply reiterated the susceptibility of the markets to geopolitical tensions.
Russia’s invasion of Ukraine has entered its 2nd month with more companies announcing that they are exiting their Russia holdings including Shel, bp, Equinor, ExxonMobil, Schlumberger, Halliburton, Baker Hughes, KCA Deutag and others. The reality however is that Europe remains tied to Russia due to their dependence on Russia to meet 40% of their natural gas needs. That energy demand is not disappearing; perhaps, high gas prices can help with that albeit slowly. As such, the supply choke due to Russian sanctions will only keep oil prices higher. …