⦿ Executive Snapshot

• What: Oil prices remain volatile due to supply risks and a newly extended US waiver allowing the sale of Russian oil.
• Who: ING analysts Warren Patterson and Ewa Manthey, US government, Asian buyers, Chinese refineries.
• Why it matters: The dynamics of oil supply and geopolitical tensions are impacting global oil prices and market stability.

⦿ Key Developments

• The US has extended a waiver allowing the sale of Russian oil floating at sea for an additional 30 days, aiming to stabilize oil markets.
• Iranian-related risks and supply disruptions in the Persian Gulf continue to cause significant volatility in oil prices.
• Chinese refinery runs processed 13.35 million barrels per day in April, marking a 5.8% decrease year-on-year, the lowest level since August 2024.

⦿ Strategic Context

• The oil market is currently sensitive to geopolitical tensions, particularly with Iran, which has historically influenced supply dynamics and pricing.
• Recent waivers and sanctions illustrate the ongoing interplay between international relations and energy markets, impacting both supply and demand.

⦿ Strategic Implications

• Immediate consequences include heightened price volatility and potential supply shortages as geopolitical tensions escalate.
• Long-term implications may involve shifts in global oil supply chains, particularly as Asian markets adapt to fluctuating availability of Russian oil.

⦿ Risks & Constraints

• Potential risks include regulatory changes or further sanctions that could disrupt oil supply from key regions like Iran and Russia.
• Competition from alternative energy sources and the evolving landscape of global energy demand may pose challenges to traditional oil markets.

⦿ Watchlist / Forward Signals

• Monitoring the impacts of the US waiver expiration on June 17 will provide insights into market stability and pricing trends.
• Future developments in US-Iran negotiations could significantly affect oil supply dynamics and market reactions.