Seven days that could unravel the global oil market

Seven days that could unravel the global oil market

As an epic oil crash threatened more havoc on a pandemic-stricken global economy in April 2020, the US, Saudi Arabia, Russia and other G20 countries met to thrash out a solution. The co-operation helped end an Opec+ price war and restored stability to the market. Prices recovered.

Two-and-a-half years later, and nine months into Russia’s war in Ukraine, such collaboration on energy between global powers seems a distant memory.

Moscow has weaponised its natural gas supplies to Europe for months and is now actively trying to disable Ukraine’s electricity network. Consumer countries have become competitors as they race to secure scarce energy supplies. Fractures are visible in the decades-old Saudi-US oil relationship. Even in clean energy, leaders such as Joe Biden talk of a new battle to dominate supply chains.

The potential unraveling of the old order in the global oil market will reach a defining moment over the next week when Europe starts to block Russian seaborne crude from the continent — one of the strongest responses yet to Vladimir Putin’s brutal invasion of Ukraine.

The new sanctions will also stop European companies from insuring vessels carrying Russian oil to third countries — unless those countries accept a price for the oil dictated