Daily Update: June 17, 2022

Start each business day with our analyzes of the most pressing developments affecting markets today, along with a curated selection of our latest and most important news on the global economy.

Russia’s crude exports rise as global energy crisis deepens

The divestment of the world economy vis-à-vis Russia has disrupted more than 10% of world oil flows, but the energy superpower continues to export the raw material to recalcitrant buyers.

Russia’s attack on Ukraine has spurred unprecedented penalties Western economies and their allies who continue to disrupts global commodity marketsin particular by restricting the supply of Russian oil which represents nearly 13% of total oil exports, according to S&P Global Commodity Insights. However, Russian maritime crude exports remained at their highest level in three years after the pandemic in the first half of June as China and India gobble up oil from the former Soviet superpower. Russian Deputy Prime Minister Alexander Novak announced today that the country’s oil exports increased by 12% in the first five months of 2022.

“The United States has already banned imports of Russian crude, and with the European Union in the process of doing so, that has left Asia as the only major outlet for these crudes,” said Lim Jit Yang, oil markets adviser at Platts Analytics of S&P Global Commodity Insights. “As a result, Asian buyers should have the upper hand in terms of price.”

Changing market dynamics come as oil outlook supply becomes more worrying. The International Energy Agency warned this week that global oil supply may struggle to match demand in 2023 due to Russian constraints, OPEC+ production reserves, and China’s needs following its COVID lockdowns. The OPEC producer coalition said this week that crude demand is expected to increase while Russian production will fall by the end of the year.

Market participants expect Russia’s oil exports to increase and the country to be able to circumvent sanctions imposed by the EU prohibiting operators in the euro zone ensure and finance the maritime transport of Russian oil to third countries by turning to suppliers from other regions wishing to intervene. Other market participants believe that alternative approaches to energy sanctions against Russia could punish the aggressor for its invasion of Ukraine while stabilizing the world oil market.

“There are always ways for cheap rough to get inespecially when they remain competitive even after factoring in freight and insurance,” a crude trader at a Chinese state-owned oil company told S&P Global Commodity Insights, explaining that China and India are likely to take more Russian crude, while Europe could import more. Barrels from the Middle East.

Today is Friday, June 17, 2022and here is today’s essential intelligence.

Written by Molly Mintz.

Economy


Listen: The Essential Podcast, Episode 63: India Unleashed – Reforms Needed for an Emerging Economic Superpower

Dr. Ajay Chhibber joins the Essential Podcast to talk about India’s path to becoming an upper-middle-income country, the reforms needed that will unlock the country’s potential, and the challenges still holding it back. S&P Global’s Essential Podcast is dedicated to sharing essential information with those who work and are affected by the financial markets. Host Nathan Hunt focuses on issues of immediate importance to global financial markets – macro trends, credit cycle, climate risk, ESG, global trade and more. – in interviews with subject matter experts from around the world.

—Listen and subscribe to The Essential Podcast from S&P Global

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Capital markets


Listen: Take Notes: How Australia’s Renminbi Sector’s Resistance to Monetary Tightening Will Be Tested

Credit analyst Erin Kitson joins the latest episode of Take Notes to discuss the Australian RMBS sector’s likely resistance to rising interest rates in the country due to inflationary pressures. They dive deep into a scenario analysis conducted to explore borrower sensitivity to rising interest rates, the industry fixed rate phenomenon, property prices, unemployment, geographic diversity and performance. ratings.

—Listen and subscribe to Take Notes, a podcast by S&P Global Ratings

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International trade


Russian maritime oil exports at 3-year high despite sanctions shake-up

Russian exports of maritime crude remained at post-pandemic highs in the first half of June as India and China continued to source supplies at discounted prices despite tougher Western sanctions against Moscow. Compared to pre-war levels in January and February, crude exports from Russia from June 1-15 increased by 576,000 bpd to an average of around 3.88 million bpd , according to preliminary data from shipping analytics provider Kpler. The latest export flows, up from 3.81 million b/d in May, put Russian maritime crude exports at their highest since May 2019.

—Read the article by S&P Global Commodities Outlook

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ESG


Listen: critical moment for EU carbon market reform as lawmakers finalize negotiating positions

Attempts to overhaul the EU’s emissions trading system have entered a critical period as the European Parliament and European Council aim to finalize their negotiating positions by the end of June. The European Parliament rejected the bill proposed by lawmakers in its plenary vote on June 8, but is preparing for a second vote on June 22. The eastern flank of Europe. Frank Watson and Michael Evans of S&P Global Commodity Insights look at the key elements of the negotiations and explain why they matter to carbon prices and other energy commodity markets in Europe.

—Listen and subscribe to Future Energy, a podcast from S&P Global Commodities Outlook

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Energy and raw materials


Listen: Premium Gasoline Comes at a Cost

In this episode of the Oil Markets Podcast, Light Price Editors Sarah Hernandez and Jordan Daniel and U.S. Clean Products Manager Matthew Kohlman discuss record gasoline prices affecting drivers across the United States. They discuss historically low inventories, how an octane shortage is driving up premium prices, what the outlook is for gasoline demand, and prices through the rest of the summer.

—Listen and subscribe to Oil Markets, a podcast by S&P Global Commodities Outlook

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Technology and media


Top tech stocks lost $3 trillion in market capitalization in 2022

For years, large-cap tech stocks looked invincible. Then came 2022. Year-to-date through June 13, Microsoft Corp. and FAANG shares — the historically prized basket of Facebook operator Meta Platforms Inc., Apple Inc., Amazon.com Inc., Netflix Inc. and Google-parent Alphabet Inc. — lost $3.328 trillion combined.

—Read the article by S&P Global Market Intelligence

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