Let me start with asking you about the news of the hour, and that is the price
gap, you know, on Russian crude products that have been imposed by both the EU as
well as the G7 countries and Australia. How are you assessing what the
implications of that would be? Given that we did finally see the
pricing as of yesterday, I think we have already seen the first press gap and
crude prices. And we have not seen a major challenge
in terms of availability of oil and in terms of the markets.
We didn't see any disruption. But what it meant is that when we look
at the Russian oil and gas export revenues
one year just before the war and end of January this year, Russian oil and gas
revenues declined by about 30 percent. It is the in terms of gas, in terms of
oil, their revenues went down and the G7 and we are seeing a major disruption in
oil and gas markets. Right.
So you believe price gaps, whether it is the price gap on oil or on derivatives.
Those have been successful in achieving what these nations set out to do.
I think from the nation's point or feel there, as far as I know, there were two
objectives is still there will be enough oil in the markets, so no supply
disruption. And second, the Russia's dividends would
go down. When I look at the numbers, I think they
have reached, at least for now. Both of these objectives fully.
I'll talk to you about prices that are
too big demand factors playing out in the developed world.
At least we're continuing to see concerns around inflation, interest rate
hikes. And then there's the China reopening
story, which has yet doesn't seem to have had a big impact on oil, on prices.
How are you assessing where prices are headed and what the key influencers will
be over the course of the next few months?
And there are many uncertainties, as we have been discussing since a year.
Oil markets are always seeing a lot of uncertainties.
But if in the year twenty two out of three, if you ask me to choose the most
important uncertainty it is for me, China.
What for? Oil and gas markets.
Because last year, 2022, Chinese oil and gas consumption, domestic consumption
declined for the first time since 40 years.
We have never seen Chinese bullion guys demand decline since 40 years.
And if you consider that China is the number one oil importer of the World
Cup, LNG importer of the world. If Chinese equal energy bunce rebound
strongly, this will have important implications for the oil and
LNG markets. Because even for inspiration, if you see
a moderate rebound of China's economy, we expect this year about half of the
growth in global oil demand will come from China only.
But this is a moderate and maybe it is. Some international financial
institutions claim China's economic rebound may be much stronger than
expected. This will put some higher upward
pressure on the demand side and therefore under prices, unless OPIC plus
countries take steps to comfort the markets.
But the same applies to LNG markets as well.
I'm going to ask you to answer the question in just a bit.
But before that, Mr. Barone, why haven't we seen any sudden
yet off the China recovery process into prices yet?
Do you think because it's just too neat. It is just starting Verizon before
coming here. I look at the jet fuel demand in China,
just squeezing very latest from the very best.
If the rebound continues at this pace, we may see a definite upward pressure on
the demand side.