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Pierre Andurand 🇺🇦🌻🇫🇷🇪🇺 Profile picture
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Jun 16 • 5 tweets • 1 min read
So far the Russian invasion of Ukraine has brought MORE oil to the market. The amount released by strategic reserves around the world is more than russian export or production losses. 1/5
Seasonally in average global demand goes up 3mbd between 1h and 2h of year. We had Chinese lockdowns in the weaker period of the year, and despite that we have very tight physical markets for both refined products and crude 2/5
By the end of the year we will lose a significant amount of Russian oil and there will be no more (or at least a lot less) strategic stocks being released. In order to balance the market we will need either a massive recession/financial crisis, or rationing being implemented 3/5
Global crude and condensate exports are lower in 2022 than 2017, 2018, 2019. And most producers are at max production capacity. Has global production capacity peaked? 4/5
Signs of demand destruction will come from gasoline/diesel markets. But those cracks (price of product vs crude) carry on going higher for now. 5/5

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More from @AndurandPierre

Pierre Andurand 🇺🇦🌻🇫🇷🇪🇺 Profile picture
Mar 21
A few thoughts on possible oil sanctions on Russia. 1) an easy solution would be to put a 100% tax on Russian oil imported by European countries. That way those who can will buy alternative barrels, or bid Russian oil at 50% discount. Some would go to China/India but they 1/
would bid 45% discount. The countries like Germany that made themselves very dependent on Russian oil would end up paying more, and it is only fair to pay for past mistakes instead of keeping Europe hostage. There would probably still be a shortfall, but that could 2/
be compensated by global IEA SPR release and demand reduction mandates, and maybe by extra production by Gulf countries if they can (not sure). That would not be too disruptive and as a result Russia would receive less cash. 3/
Read 6 tweets
Pierre Andurand 🇺🇦🌻🇫🇷🇪🇺 Profile picture
Mar 16
Imagine a world where autocratic countries trade only with each other. Russia, Saudi, Iran would basically only sell oil to China+, but China+ would need a lot less oil because they would not have the EU and US as export markets. So there would be 20mbd to be sold for 10mbd of 1/
import demand maximum, leading to prices crashing, in Yuan, and leading to all those economies collapsing. There is no creativity under autocratic regimes, so what else would they do? Pretty much nothing. They all despise the west, but could not live without it. 2/
China’s domestic economy is not strong enough to have economic growth without exports to the west. And for the jokers who think this is the end of the USD as reserve currency: do you really believe that a currency of any autocratic country 3/
Read 4 tweets
Pierre Andurand 🇺🇦🌻🇫🇷🇪🇺 Profile picture
Apr 10, 2020
A few thoughts on the OPEC++ meeting. Great effort from all parties so far, at least on paper. Now what does that mean for oil prices? We are still likely to reach tank top late April/early May. But inventories are likely to then draw from June onwards and reach today’s levels 1)
in about 1 year. Is it good news for oil prices relative to the alternative of no deal or much smaller cuts? I am not so sure. Large production cuts would have happened through shut ins from May onwards anyway due to the lack of demand and storage availability. 2)
It would have been a lot more disorganised. The weakest producers would have had to go under or be bailed out by the government. Assets would still have been taken over by stronger oil companies. I think it leads to lower prices a year down the road relative to if 3)
Read 5 tweets

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