Just trying to guess where oil markets are led. None of all the seats held yesterday emerged. It does not seem that there is a clear conflict between Russia and Ukraine. But do you think where the crude leadership is?
Vandana Hari: The crude holding pattern is likely to stay. As you have pointed out, it is not much to move on in the oil markets when it comes to evaluating what will happen to the war in Ukraine, and as a result, western restrictions and restrictions against Russian oil can develop. This, in turn, affects the expectations related to the flow of Russian oil – even if there will be future disruptions or if they continue as the current. Therefore, there are many points to connect to oil markets.
If we take one step back, something has changed basically about how the oil markets saw the situation before the summit of Trump and Putin last Friday. Summit and subsequent events, including Zelensky, have changed the point of view. Until last Friday, the focus was on a potential ceasefire, which I saw as a quick remedy – a resolution, yes, brought peace – but leaving the basic reasons behind the conflict.
What has changed now is that the ceasefire seems from the table, and focusing on solving very large issues: a regional dispute between the two countries and Ukraine’s security guarantees. For oil market participants, this means to adopt a waiting and clock approach. Going from a possible ceasefire to a full resolution will be clearly longer. It will be a longer, more winding and more difficult way. Therefore, it does not make much sense to make a stake on whether or not to go long or short on oil right now. It’s just a waiting and watch scenario.
Living events
At the same time, Trump is proposing a tripartite gathering going forward. If a peace deal is signed and the supply of Russian oil increases, do you think the direction will change, especially because Trump currently claims to be a piss -maker?
Vandana Hari: Even when we are in the holding pattern, it is worth considering what can happen in the next two weeks. According to Trump and some European leaders, the timeline I have suggested two weeks; A European leader said it could take three weeks. It can pull for a long time.
In the meantime, there is a chance that things will deteriorate. The next step is the bilateral meeting between Zelensky and Putin, based on what Trump said after his seats. Both of these leaders have not met since the war began. It is likely that he may return or get worse. At that time, Trump may consider imposing secondary tariffs on countries like China, Turkey or Brazil, but it is speculative.
My base case is that this process can pull ahead of two to three weeks. Given the current trade stress, Trump is not more likely to impose a secondary tariff on China or Brazil, which means that the picture for Russian oil supply and concerned market concerns will not change further in the near term.
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