Commodities
Russia and India will switch to a new oil trade business model
India keeps buying Russian oil in large quantities and carries on the oil trade business. However, it seems that by the end of the year it will have to adapt to the new trading system – through small independent traders, which will save Indian business from the pressure of the U.S. and the EU.
The probability that India will expand the channels to import Russian oil by involving small foreign traders in the process is quite high. Firstly, Indian companies will not have to wait for approval of long-term contracts with Russian suppliers. Secondly, India will be able to remove its own large companies from possible pressure.
Russia will win in any case, because there will be a steady buyer for its oil, and the absence of economic stiffness with Western sanctions will make it possible to increase exports. Now the oil trade chart is extremely unstable, so it is important for traders to keep abreast of all developments.
What oil trade brokers need to know: the time for small traders is coming
The Economic Times recently reported that India’s biggest oil refiners are considering involving small foreign firms in supplying discounted oil from Russia which “was abandoned by the Western importers”. At the moment in the turnover of Russian hydrocarbons are involved such new players as Wellbred, Manfort Capital Energy, and others, who filled the niche of suppliers after the departure of big traders. The edition stressed that Indian oil refiners are ready to take risks, as the new companies guarantee cheap raw material supplies to India.
India could switch to working with small traders to cover current needs. If we are talking about long-term contracts, then it is more reliable for the state to enter into an agreement with a supplier directly. But there is a probability that Russian oil producers do not currently have free volumes to guarantee their delivery to the Indian market. Therefore, it is easier for India to buy individual batches with the help of traders. Now is not the best time for crude oil trading, so market participants have to take such steps.
When Indian companies started to actively buy crude oil in Russia and make new contracts with Russian companies, they started to come under pressure. The U.S. indirectly urged the Indian government not to let Russia bypass sanctions. Although U.S. rhetoric has changed somewhat recently, the risks for large Indian businesses remain.
Crude oil trade today: Buying volumes may even rise
It makes sense for both Russia and India to look for options for crude oil trade today that would be safer than the usual models involving using dollar financial infrastructure and its variations. Western insurers, freight and so on.
There are large companies in India that are under the scrutiny of the Western public, the media. It is better for these big players to step back somewhat so that all transactions with Russia are handled by second-tier companies. The same thing is happening in China: there are first-tier companies; they want to stay in the market of Western countries. But there is a mass of companies, maybe even related to the first-tier business, that actively interact with Russia.
The transition to trading through small traders may require adaptation, but on the whole, this scheme is working. This is confirmed by the growth in oil supplies from Russia to India to almost one million barrels per day.
Depending on what happens next, India may also increase its oil purchases. Compared to the June peaks, supply has slightly decreased. There will be a lot of Russian oil on the Indian market, and the new trading mechanisms will soon replace the old ones. At the same time, the U.S. will no longer be able to influence the mentioned second-tier companies from India.
(Reuters) – Goldman Sachs adjusted its expectations for OPEC+ oil production saying it now expects three months of production increases starting from December instead of October, the bank said in a note on Friday.
OPEC+ has agreed to delay a planned oil output increase for October and November, the producers group said on Thursday after crude prices hit their lowest in nine months, adding it could further pause or reverse the hikes if needed.
However Goldman Sachs maintained its range of $70-85 per barrel and a December 2025 Brent forecast at $74 per barrel.
The investment bank expects the effects of a modest reduction in OPEC+ supply in the upcoming months to be counterbalanced by easing effects from the current softness in China’s demand and faster-than-expected recovery of Libya’s supply.
“We still see the risks to our $70-85 range as skewed to the downside given high spare capacity, and downside risks to demand from weakness in China and potential trade tensions,” Goldman Sachs said.
Brent crude futures were down $1.63, or 2.24%, to $71.06 a barrel on Friday, their lowest level since December 2021. U.S. West Texas Intermediate crude futures fell $1.48 on Friday, or 2.14%, to $67.67, their lowest since June 2023. [O/R]
Investing.com — Oil prices settled lower Friday, ending the week with a loss as weaker U.S. nonfarm payrolls stoked concerns about an economic-led slowdown in crude demand.
At 2:30 p.m. ET (1430 GMT), the futures (WTI) traded fell 2.1% to settle at $67.67 a barrel, while contract fell 2.2% to $71.06 per barrel.
U.S. economic slowdown worries resurface after weak jobs report
The US economy added fewer jobs than anticipated in August, but rose from a sharply revised July figure, according to Labor Department data that could factor into the Federal Reserve’s next policy decisions.
Nonfarm payrolls came in at 142,000 last month, up from a downwardly-revised mark of 89,000 in July. Economists had called for a reading of 164,000, up from the initial July mark of 114,000.
Following the release, bets that the Fed will introduce a deeper 50 basis-point rate cut — rather than a shallower 25 basis-point reduction — increased.
Concerns about the demand come just a day after OPEC+ said it had agreed to postpone a planned increase in oil production for October and November.
U.S., Europe working on Iran sanctions
Geopolitical tensions ratcheted up on Friday after the U.S. and Europe they were working on sanctions to impose on Iran after the Tehran sent missiles to Russia.
The U.S. had previously warned Iran about transferring missiles to Russia, saying it would represent a major escalation in Iran’s support of Russia’s war against Ukraine.
Investing.com — Oil prices settled lower Friday, ending the week with a loss as weaker U.S. nonfarm payrolls stoked concerns about an economic-led slowdown in crude demand.
At 2:30 p.m. ET (1430 GMT), the futures (WTI) traded fell 2.1% to settle at $67.67 a barrel, while contract fell 2.2% to $71.06 per barrel.
U.S. economic slowdown worries resurface after weak jobs report
The US economy added fewer jobs than anticipated in August, but rose from a sharply revised July figure, according to Labor Department data that could factor into the Federal Reserve’s next policy decisions.
Nonfarm payrolls came in at 142,000 last month, up from a downwardly-revised mark of 89,000 in July. Economists had called for a reading of 164,000, up from the initial July mark of 114,000.
Following the release, bets that the Fed will introduce a deeper 50 basis-point rate cut — rather than a shallower 25 basis-point reduction — increased.
Concerns about the demand come just a day after OPEC+ said it had agreed to postpone a planned increase in oil production for October and November.
U.S., Europe working on Iran sanctions
Geopolitical tensions ratcheted up on Friday after the U.S. and Europe they were working on sanctions to impose on Iran after the Tehran sent missiles to Russia.
The U.S. had previously warned Iran about transferring missiles to Russia, saying it would represent a major escalation in Iran’s support of Russia’s war against Ukraine.
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