It would seem from the IEA’s May Oil Market Report that geopolitical issues and industry disruptions are confusing the market.
Ongoing production problems in Libya, alongside OPEC+ production cuts and U.S. sanctions on Iran, as well as lower than expected output in Mexico, have raised fears of a supply crunch. In addition, attacks by pirates or terrorists on shipping near the UAE port of Fujairah and the pumping stations of a Saudi oil pipeline have unsettled traders.
Druzhba pipeline system
On April 24th, Transneft halted shipments of contaminated Urals blend to the 1.4 mb/d (million barrels per day) Druzhba pipeline system and to tankers at the Ust-Lunga export terminal in the Baltic, which serve refineries in Germany, Poland, Ukraine, Hungary, Slovakia and the Czech Republic. As of April 25th, while the Czech Republic and Hungary have started to receive half their normal daily supply, the northern spur pipeline to Belarus, Poland and Germany was still closed, depriving European refineries of around 700,000 barrels of crude per day.