Oil prices rise on Kazakhstan supply disruptions: is downside momentum fading for now?

Oil prices rose on Tuesday, following a drone attack on a Russian oil pipeline pumping station, which disrupted flows from Kazakhstan and added to gains from the prior session.

"De recente aanval op het pompstations van de Kaspische pijpleiding heeft de oliestroom uit Kazachstan verstoord, wat zorgen baart over mogelijke tekorten", aldus Muhammad Umair, analist bij FXempire.

The recent drone strike targeting the Kropotkinskaya station in Russia's southern Krasnodar region has significantly disrupted the flow of shipments from Kazakhstan to global markets. 

This disruption has particularly impacted Western energy firms such as Chevron and Exxon Mobil, which rely on the Caspian Pipeline Consortium (CPC) for transportation.

The CPC, which operates the pipeline, announced on Monday that the attack has led to a decrease in their ability to transport oil from Kazakhstan to key markets worldwide. 

This disruption could have far-reaching consequences for the global energy market, potentially leading to price fluctuations and supply shortages.

At the time of writing, the price of West Texas Intermediate crude oil on the New York Mercantile Exchange was at $71.48 a barrel, up 1.1%. Brent crude on the Intercontinental Exchange was at $75.44 per barrel, up 0.3% from the previous close. 

Op de lange termijn blijft de opwaartse potentie beperkt

Hoewel de prijzen dinsdag stegen, denken analisten dat het potentieel voor een verdere stijging van de olieprijzen op de lange termijn beperkt is.

The Organization of the Petroleum Exporting Countries and its allies are scheduled to raise oil production in April. 

On Monday, Russian Deputy Prime Minister Alexander Novak said that OPEC+ countries were not mulling delaying the planned supply increases from April. 

In december 2024 stemde OPEC ermee in om de vrijwillige olieproductievermindering met 2,2 miljoen vaten per dag te verlengen tot eind maart. Het was de laatste verlenging van de groep, nadat de vermindering al meerdere keren vorig jaar was verlengd.

Het Internationaal Energieagentschap verwacht een overschot in 2025, omdat de olielevering van niet-OPEC-landen aanzienlijk hoger is dan de verwachte groei van de vraag dit jaar.

Hoewel het in Parijs gevestigde agentschap zijn verwachtingen over het overaanbod op de markt dit jaar heeft verlaagd, zou meer aanbod van OPEC een negatief effect hebben op de wereldwijde prijzen.

Prices may get support from extended disruptions

However, some analysts said that an extended period of disruptions could prove bullish for oil prices in the coming weeks. 

“Crude seems to be building support around current levels. As far as front-month WTI is concerned, prices are finding a floor just north of $70 per barrel,” David Morrison, senior market analyst at Trade Nation, said. 

Trade sanctions imposed on Russia have resulted in a significant number of shipping vessels being unable to leave Russian ports, creating a bottleneck effect that has severely disrupted the flow of energy, particularly crude oil and natural gas, to Asiatic countries. 

This disruption has had a cascading effect on the energy security and economic stability of the region, leading to increased energy prices, shortages, and potential blackouts.

The sanctions have also impacted other sectors that rely on maritime trade with Russia, such as agriculture and manufacturing, further exacerbating the economic challenges faced by Asiatic nations.

"De wereldwijde vraag naar ruwe olie blijft ook achter bij de verwachtingen, waardoor sommige pompagencies hun productiecijfers hebben verlaagd", aldus Joshua Gibson, redacteur bij FXstreet, in een rapport.

Is de neerwaartse momentum voorlopig verdwenen?

"De dagelijkse MACD vlakt af, wat aangeeft dat de neerwaartse momentum, die zich sinds de piek van de olieprijzen halverwege januari had opgebouwd, begint af te nemen," aldus Morrison.

The global oil market is currently facing a period of uncertainty due to the unpredictable nature of President Trump's tariff threats. 

The potential imposition of tariffs on oil imports could have a significant impact on the supply and demand dynamics of the market, leading to price fluctuations and disruptions in trade flows. 

The current situation presents a potential for increased supply entering the market. This hinges on the possibility of peace talks being arranged between Ukraine and Russia. 

"Als deze gesprekken succesvol blijken en leiden tot een staakt-het-vuren, kan de daaropvolgende oplossing van het conflict leiden tot een toename van de marktvoorziening", voegde Morrison toe.