It is the most significant set of market dislocations and distortions in energy markets generally speaking. The oil market looks drastically different today than it did a year ago, when Russia invaded Ukraine.
Russia was exporting much of its crude and petroleum products to Europe, with a much smaller portion going to China, India, and other Asian nations.
By the end of 2022, that ratio had completely flipped.
Russian crude oil was simply reshuffled from old customers in Europe to new customers in Asia.
The latest in a series of sanctions on Moscow by Western nations in response to the war was imposed earlier this month: Those include an E.U. ban on Russian oil product exports. Prior to that, a G7 price cap on Russian oil was implemented in order to weaken the country’s coffers.
The reopening of China following strict COVID lockdowns is seen as bullish for energy prices going forward, but so far oil has mostly been trading in a tight range.
Energy prices have been relatively weak this year as we have a very warm winter in both North America and Europe. The weather has caused natural gas prices to plummet and oil prices to weaken, which weighs on energy stocks.
Both the U.S. and Europe have increased their efforts to go green with renewable energy efforts, as companies invest in solar, wind, and biofuels.
The energy transition is absolutely seeing an acceleration as a result of Russia/Ukraine.