Experts: Energy truce between Ukraine and Russia will not lower price of oil
Estonian experts say restoring oil flows through the Strait of Hormuz would have a far greater impact on global markets than an energy infrastructure truce between Ukraine and Russia.
On Monday evening, U.S. President Donald Trump wrote on social media that Ukraine had agreed not to strike targets related to Russia's energy infrastructure and that Russia had agreed to do the same. The president said the rise in global diesel prices was mainly due to the war between Russia and Ukraine, rather than Iran.
Alan Vaht, a member of the management board of Estonian fuel retailer Terminal, disagrees with that claim.
"Russian diesel exports have fallen by 500,000 barrels per day, while the decline in the Persian Gulf region has been more than 1.1 million barrels per day. So we're actually talking about figures that aren't comparable at all," Vaht said.
Economic expert Raivo Vare believes Trump himself is the one who primarily needs an energy truce between Moscow and Kyiv.
"Now gallon prices have risen from $3.80 (€3.29) to $6.30 (€5.43) and continue to rise. The midterm elections are coming up and that's why Trump is worried. Why? Because he needs those prices to come down," Vare said.
Ukraine immediately agreed to the proposed energy truce. But why does Russia need it?
"Russia is having difficulty supplying itself with gasoline and diesel and that has been a strong argument for Ukraine. If that leverage is now taken away, Ukraine's position objectively becomes weaker and that has to be taken into account," Vare said.
However, Russia wants more than simply an end to Ukrainian attacks on its oil refineries.
"Second, of course, the sanctions, those illegal restrictions on supplying energy resources to the global market, must be lifted. Only then can the world, the global market, be supplied with petroleum products and prices begin to fall," Russian presidential spokesperson Dmitry Peskov said.
For now, however, fuel prices at filling stations are rising not only in the United States but also here in Estonia.
"The only thing that would genuinely help the world and the global fuel market, including Estonia's fuel market, is an agreement between Iran and the United States and the resumption of flows of crude oil and refined petroleum products through the Strait of Hormuz. That is the only effective solution for bringing fuel prices down," Vaht said.
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Editor: Marcus Turovski, Johanna Alvin
Source: "Aktuaalne kaamera"
