On Friday, crude oil prices rose due to a sharp decline in Russian production caused by a lack of technology and equipment.
Crude oil futures for April delivery improved by 0.01% to $78.17 per barrel on March 03’s Asian afternoon session. Likewise, Brent contracts for May shipments progressed by 0.04% to $84.78 a barrel.
According to analysts, restrictions could lead to a 20.00% drop in Russian oil production by 2023. It is bound to happen if the country will not work on solving its critical technology issues in the oilfield services market.
In 2021, Moscow produced 540.00 million tons of crude oil, responsible for 13.00% of global outputs.
Also, they mentioned that its exports were anticipated to fall by around 300,000.00 barrels per day. They added that it continues to have difficulties in rerouting refined product transports.
As experts reported, Russia plans on cutting crude oil deliveries from its western ports by 25.00% in March. This move is an attempt to lift the prices for the commodity.
In addition, they expect Indian and Chinese demand to increase to 1.00 million bpd collectively this year.
Chinese seaborne imports of Moscow’s crude oil are bound to hit a high record in March. Furthermore, it is followed by a strong Indian demand.
However, the Russian central bank noted that they could deal with more competitive refiners in the Middle East.
Chinese Demand Pulls Up Crude Oil Prices
After Chinese authorities reported that there had been a growth in manufacturing activity, crude oil prices were set to rise. As a result, it added signs of a rebound in the world’s second-largest economy after the lift of uptight COVID-19 restrictions.
This week, the industry could reverse its streak of weekly plunges, lifted by the expected Chinese demand rebound.
Moreover, the country’s gross domestic product is forecasted to broaden by more than 5.00% year-on-year. The acceleration will most likely boost the oil demand significantly.
On the bearish side, there is a ten-week streak of crude oil storage additions in the US, easing concerns about supply.