- Nearly 62 million barrels of Urals crude oil are trapped in vessels at sea, as per the estimates made by analytics firm Vortexa.
- The world is facing a major oil supply crisis as most companies are afraid to invest in the sector because of the green energy pressure.
- Saudi Arabia has faced numerous calls from the US to boost output and expand production capacity as soon as possible to combat the energy crisis.
The global oil crisis has intensified ever since Russia officially announced Ukraine invasion. Russia is a key crude oil supplier, accounting for nearly 10% of the world's total supplies. In response to the unilateral military action on Ukrainian territory, numerous sanctions have been imposed by some of the western nations on Russian oil trade, restricting the purchase of Russia’s flagship Urals crude oil.
As per the recent data from energy analytics firm, Vortexa, nearly 62 million barrels of Urals crude oil, are sitting in vessels at sea. Not only the US and Ukraine, but the European Union is also considering an embargo on Russian oil.
As per the estimates, the volume of Russian crude oil on water is almost triple, in comparison to the pre-war volumes. The volume figures are nearly 15% down from February’s 7.9bpd.
Global Energy Crisis
Currently, the world is facing a major oil supply crisis as most companies are afraid to invest in the sector because of the green energy pressure.
Source: © Alexlmx | Megapixl.com
Additionally, a ramp-up in the fuel demand from the aviation sector to the pre-pandemic level could further intensify the crisis. The subdued demand from China due to ongoing COVID-19 restrictions would not last long as the authorities plan to ease lockdowns in Shanghai. This will eventually boost energy demand in the near term.
Furthermore, Saudi Arabia has faced numerous calls from the US to boost output and expand production capacity as soon as possible to combat the energy crisis.
How is Global Oil Crisis a double-edged sword?
The ongoing energy crisis looks like a dramatic irony. While the world is reeling under an energy crisis, Russian crude oil cargoes are floating at sea with no set destinations.
Additionally, the current situation has become a double-edged sword for the global economy. Increased energy demand after the pandemic and tight supplies have resulted in crude oil prices shooting up to multi-year highs, which along with record-high inflation numbers, has been weighing heavily on economies across the globe.
At the same time, the world is hesitating to buy cheap Russian Urals oil to avoid the war funding against Ukraine. Purchasing crude at higher prices is denting nations’ economic growth.
The ongoing crude oil crisis ignited due to the war between Russia and Ukraine has become a double-edged sword for economies across the globe. High crude oil prices are denting global economic growth and at the same time, pushing inflation to record high levels.