- Oil trades higher as the US sanctions Russian crude exports and halts the release of Iranian funds
- November ’23 WTI gained $3.93 this morning to trade around $86.84/Bbl
- The U.S. tightened sanctions on Russian crude exports, heightening supply concerns in a market already expecting a decline in global inventories through the fourth quarter
- Additionally, following Hamas’s surprise attack on Israel, the US and Qatar blocked Iran from accessing $6 billion of its frozen oil revenue, initially set to be released in exchange for Americans imprisoned in Iran
- Furthermore, Iran’s Foreign Minister warned that Tehran-backed militants might introduce a new front in Israel's battle with Hamas, heightening worries that the conflict could impact global oil supply
- Given Iran's suspected backing of Hamas and involvement in the recent attack, there are concerns about potential actions against Iran, including U.S. restrictions on its oil or direct Israeli retaliation
- The CPI in September held steady at 3.7%—still a ways off from the Fed’s 2% target for inflation
- Fed officials recently indicated a likelihood to maintain short-term interest rates during their Oct. 31-Nov. 1 meeting, as a surge in long-term rates, might dampen economic growth
- US sanctions two oil tankers carrying Russian crude for violating the oil-price cap (Bloomberg)
- On Thursday, the US imposed sanctions on two oil tanker owners for carrying Russian crude above the West’s price cap of $60/Bbl and also blocked two of their vessels
- Deputy Treasury Secretary Wally Adeyemo reaffirmed the US's commitment to the price cap policy aimed at both limiting Russia's oil revenue and ensuring a stable global energy market
- The US's move came after reports showing Russian oil revenues reached a 14-month high in September
- September's data showed the weighted average export price of Russian oil rose to $81.78/Bbl, narrowing the discount to Brent just $12.18/Bbl, the lowest since March 2022
- Russia ramps up diesel exports after easing export ban (Bloomberg)
- Moscow revised its October seaborne diesel exports upwards to 0.334 MMBbl/d following the recent lifting of a significant ban on diesel shipments
- Despite the increase, diesel loadings from Russian ports (both Black and Baltic seas) are projected to reach 1.4 million tons (10.4 MMBbl) this month, marking a 26% decrease from September’s plan
- The significant reduction in exports from month to month is due to the export ban enforced in early October and ongoing mandates requiring producers to retain a minimum of 50% of diesel for domestic consumption