Asian Refiners’ Role in “Laundering” Russian Oil, Latest Oil Market Forecasts, and Oman’s LNG Boom

MAIN TAKEAWAYS

• The global oil market is expected to experience high volatilities due to the inefficient, high-risk, and high shipping costs of the Russian oil “laundering” schemes that will keep Russian oil flowing to Europe.

• Sanctions on Russia’s oil have shifted attention from OPEC+ and other oil producers to top oil refiners,

  namely China and India.

• Countries with spare refining capacities are set to make gains, while those that supported climate change policies to close refineries will lose.

• China’s economic reopening is stirring chaos in the market. Questions are being raised about how bullish the event is, and how much of the reaction is based on mere perception.

• There is enough spare production capacity within OPEC to handle demand growth in 2023. But tightness is expected in the fourth quarter, especially if non-OPEC producers failed to deliver the expected growth in production.

• Oman’s LNG is playing an increasing role in Asia. Oman LNG’s decision to strike long-term contracts shows that these types of contracts are here to stay as they reduce risks for exporters and importers.  

• The role of spot LNG may not increase significantly above current levels as some experts have predicted.

IN DETAIL

Russia Sanctions and the Rise of “Oil Laundering”