InvestorQ : Do you see the Suez Canal case impacting oil prices due to supply shortfalls?
manisha Kolvenkar made post

Do you see the Suez Canal case impacting oil prices due to supply shortfalls?

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Crowny Pinto answered.
3 weeks ago
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Despite the blockage of the Suez Canal, the one trend was that the resurgence of COVID in Europe and parts of Asia. That appears to have seriously dented projections of oil demand in these countries. That led to the 12% fall in Brent Crude prices after touching a high of $70/bbl. Even as OPEC and Russia have cut supplies aggressively, demand failed to keep pace leading to oil prices falling. Suez is now more of a marginal issue on the frontier.

But the bigger story is that Oil is now a buyer’s market and not a seller’s market as it was before. Take the case of India. Today, India is able to cut down Saudi on supplies of oil since it is not happy with the price. It is also because India has the alternative option of importing oil from the US. Saudi Arabia is pampering China but even with their best efforts, fossil fuel demand will only taper lower in the years to come.

What does that mean? It means that oil is more of a buyer’s market today than being a seller’s market. That is the reason, countries like the US are keen to sell as much oil as possible and OPEC and Russia should also come around to that point of view. The only thing that matters to oil is whether demand is robust or not. Oil has finally become a buyer’s market and that good news for net oil importers like India.
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