Behind the scenes, the oil producing nations could be planning for the day when Russia's contribution to world oil supply could be far reduced.
Russia's ability to export crude could be hampered by the European Union's plan to ban most Russian oil. The EU leaders agreed this week to an embargo on oil and petroleum products, but would allow a temporary exemption for some oil delivered by pipeline.
If they prohibit insurance on tanker carrying Russian oil, that will make it more difficult to find barrels, and it's going to be a turbulent summer, said Daniel Yergin, vice chairman S&P Global.
London-based insurers write most tanker insurance.
The members of the Organization of the Petroleum Exporting Countries have been asked by the Western nations to supply more crude, which could lead to higher prices and a larger loss of Russian oil from the market.
Russian oil is reduced but that is not likely to be part of any communication from the Organization of the Petroleum Exporting Countries on Thursday.
Helima Croft, head of global commodities strategy at Royal Bank of Canada, said that they are going to try to manage it nicely with the Russians. I think they are going to thread the needle slowly. They want to get a reset with the United States.
With only four months left in the current agreement, the market is expected to return 432,000 barrels a day.
She said it was not clear how much relief would be provided, with spare capacity limited and no end in sight for the war in Ukraine.
There is a chance that Saudi Arabia will agree to a grand bargain with the U.S. before the official date.
Relations between the kingdom and the White House have soured. There is a chance that Biden could visit the country and meet the crown prince.
It has been our opinion since February that there is a deal to be had if Washington can satisfy the Kingdom's core security and strategic concerns.
The U.S. and Iran are in talks about a new nuclear agreement, but chances of a deal are slim, which could help relations with Riyadh.
There has been a lot of diplomatic movements behind the scenes.
Two-thirds of Europe's imports from Russia would be banned by the EU. Germany and Poland have pledged to end imports from the northern part of the Druzhba line, which could limit the amount of Russian imports.
By some estimates 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 888-349-8884 Analysts say oil could go back to its March high of $130.50 per barrel. The price for a barrel of crude was $113.26 per barrel.
The EU decision to block insurers from covering Russian oil shipments was unexpected. That would affect the travel of oil tanker that travel around the world and could undermine Russia's efforts to sell its oil in Asia.
A scramble for supplies is caused by a combination of sanctions, no insurance and Chinese recovery.
John Kilduff said that Russian oil may be removed from the market but not completely.
We are definitely in a tough spot right now, but the fact that we are still not back to the highs is telling. China and India will continue to be buyers. In the dark, there will be ship to ship transfers. There is little you can do about it.
Russia's ability to export may keep oil prices from rising more than the March highs. China is a wild card, and its demand may not be as high as expected once it reopens its economy. He said that there would be a supply surplus of 1.5 million barrels a day for the rest of the year.
According to the Wall Street Journal, some members of the Organization of the Petroleum Exporting Countries are considering suspending Russia's involvement from the production agreement because of sanctions. Analysts don't expect to see that at the meeting.
I think the group is trying to separate politics and economics. Francisco Blanch, head of commodities and derivatives strategy at Bank of America, said that if prices keep rising, it will hurt demand.
Blanch said that a new production plan could be put in place by the organization.
Saudi Arabia has the capacity to produce and export more oil.
The group is looking at how to prevent a crude shortage that will backfire on the group itself. If we don't do something here, they're going to blow back on us.
If Russia retaliates against Europe sooner than it plans to ban Russian crude, prices could spike dramatically.
The thing to watch is if we get Russian weaponization of exports. That could lead to a scenario where oil goes to $185 per barrel.
Russia was one of the world's top three producers, exporting about 5 million barrels a day of crude and 2.5 million barrels of refined products before the war in Ukraine. All those losses can't be covered by the organization.
Saudi Arabia was able to make up for lost barrels when Iran was hit with sanctions. It is a much more sensitive topic with Russia being a leading player in the partnership.
There may be more behind-the-scenes tensions this week between some of the members of the Organization of the Petroleum Exporting Countries and Russia.
Even if the U.S. relationship with the Kingdom improves, Saudi Arabia and Russia will still maintain close ties.
The knives are going to be out for Russia from some of the members of the group. Kilduff said that this has all the elements of a Greek tragedy.
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