Jakarta (Indonesia Window) – The Ministry of Energy and Mineral Resources has set the average Indonesian Crude Price (ICP) in February 2022 at 95.72 U.S. dollars per barrel, up by 9.83 dollars from 85 .89 dollars per barrel in January 2022.

The disruption of global oil supply in international markets due to the geopolitical conflict between Russia and Ukraine has an impact on the ICP.

"The Russia-Ukraine conflict has had a major impact on global crude oil supply. The market is starting to worry that this tension will create scarcity and distribution disruption," the ministry’s spokesperson Agung Pribadi sadi on Tuesday (March 8).

The International Energy Agency (IEA) report in February 2022 noted that there was an increase in the projected annual growth of world oil demand in 2022 by 3.2 million barrels per day to 100.6 million barrels per day, triggered by the easing COVID-19 restrictions imposed by the government.

In the same month, the OPEC (Organization of Petroleum Exporting Countries) reported an increase in its projection of world oil demand in 2022 by 17,000 barrels per day to 100.8 million barrels per day, compared to that in January.

In addition, the OPEC revised down its projection for non-OPEC countries' oil supply in February 2022 by 60,000 barrels per day to 66.61 million barrels per day compared to January’s projection.

Another factor affecting the crude oil prices is supply disruptions in the United States. Based on the weekly report by U.S. Energy Information Administration (EIA), there was a decrease in this country’s oil stocks at the end of February 2022 compared to that in last month. Gasoline stocks fell by 3.5 million barrels to 246.5 million barrels, and distillate stocks fell by 3.0 million barrels to 119.7 million barrels.

Meanwhile, in the Asia and Pacific region, the increase in crude oil prices was also caused by the rise in the estimated throughput of 35 combined refineries in China belonging to Sinopec, CNOOC, Petrochina and Sinochem Corp. in February 2022 by 3.2 percent compared to last month, to 7.2 million barrels per day.

"Japan continues to provide gasoline subsidies of 5 yen per liter to oil distributors. Subsidies have been implemented since January 27, 2022, through weekly evaluation as the government’s effort to maintain high retail gasoline prices in the country," Agung said.

Reporting by Indonesia Window