Jakarta (Indonesia Window) – The Indonesian Crude Price (ICP) in March 2022 touched the level of 113.50 US dollars per barrel due to the ongoing Russia-Ukraine conflict. This condition also raised the price of crude oil in the international market.

The world's crude oil supply, which was disrupted by the impact of the war in Eastern Europe, made the March ICP increase by 17.78 US dollars per barrel from the previous 95.72 US dollars per barrel in February 2022.

The increase in the price of major crude oil in the international market was also due to sanctions and failure of production infrastructure in crude oil producing countries.

The Indonesian Oil Price Team said that the imposition of sanctions by Western countries on Russia's crude oil exports has the potential to increase the global crude oil supply deficit when demand starts to increase.

In addition, conflicts that occurred among OPEC+ members as well as sabotage in West African countries and the civil war in Libya led to reduced production and failure to meet production quotas.

Infrastructure damage caused by the storm paralyzed the Caspian Pipeline Consortium (CPC) export facility in Kazakhstan, disrupting the distribution of crude oil of about 1 million barrels per day.

The Indonesian Oil Price Team also said that the increase in oil prices was also triggered by a European ban on imports of Russian crude oil which could potentially disrupt global crude oil supplies by 1.2 million to 4.5 million barrels per day.

Currently, OPEC+ is sticking to its initial agreement to increase supply by only 400,000 barrels per day. Saudi Arabia and the UAE as producers with large spare capacity and able to increase production instantly, have so far not shown a willingness to increase production.

The International Energy Agency predicts a deficit in the balance of supply and demand for global crude oil of 700,000 barrels per day in the second quarter of 2022.

In the OPEC report, there is a downward revision in the projection for crude oil production of non-OPEC countries this year by 12,000 barrels per day to 66.59 million barrels per day compared to the projected report in February 2022.

Meanwhile, the conclusion of the Indonesian Oil Price Team stated that there was an increase in the projected world oil demand this year by 100,000 barrels per day to 100.9 million barrels per day compared to the projected report in February 2022.

Meanwhile, the increase in prices related to oil stocks was influenced by the decline in industrial stocks of OECD (Organization for Economic Co-operation and Development) countries in February 2022 to 29.8 million barrels compared to January 2022.

At the end of January 2022, OECD countries' industrial stockpiles were 335 million barrels below their five-year average and were at their lowest in eight years.

Based on the weekly report by the United States Energy Information Administration (EIA), the decline in United States stockpiles in March 2022 compared to the previous month is as follows.

Commercial crude stockpiles fell 3.5 million barrels to 409.9 million barrels.

Gasoline stockpiles fell 7.2 million barrels to 238.8 million barrels.

Distillate stocks fell 5.6 million barrels to 113.5 million barrels.

The Indonesian Oil Price Team also said that in the Asia Pacific region, the increase in crude oil prices was also caused by these factors, as well as the Chinese government's statement that it would launch more policies to support economic growth.

Reporting by Indonesia Window