Just Wednesday, Platts reported that China received a record 4.83 million b/d of crude from OPEC in March. While Saudi barrels were down, they were more than made up by barrels from Angola, Kuwait and Venezuela.
No matter how you slice it, today’s crude market is set up to quickly displace lost supply. And this dynamic will most likely hold up until the Brent/Dubai EFS and the WTI/Dubai spread unwind. Cheaper Dubai will be the key to that. And that will come about when OPEC countries again compete for market share.
A recent upturn in Persian Gulf-Asia VLCC rates suggest this may be in the cards sooner than some had expected.Bottom line: the only thing that will raise crude oil prices significantly -- geopolitics -- a nice little war somewhere in the Mideast. Whether a skirmish on the Korean peninsula would raise oil prices was not discussed.