Global Oil Supply Disrupted, Government Sets February ICP 95.72 US Dollars Per Barrel

Illustration. (Photo: Doc. Antara)

JAKARTA - The disruption of global oil supply on the international market due to the geopolitical conflict between Russia and Ukraine has an impact on the movement of Indonesian Crude Oil Prices (Indonesian Crude Price).

The Ministry of Energy and Mineral Resources has set the average ICP for February 2022 at 95.72 US dollars per barrel, up 9.83 US dollars from 85.89 US dollars per barrel in January 2022.

This provision is stated in the Decree of the Minister of Energy and Mineral Resources Number 18.K/MG.03/DJM/2022 concerning Indonesian Crude Oil Prices for February 2022, which is set on March 1, 2022.

"The emergence of the Russo-Ukrainian 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," said Head of the Bureau of Communication, Public Information Services, and Cooperation (KLIK) of the Ministry of Energy and Mineral Resources Agung Pribadi in his statement, Tuesday, March 8th.

Based on the analysis of the Indonesian Crude Oil Price Team, continued Agung, the IEA (International Energy Agency) report in February 2022 stated 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 easing COVID-19 restrictions.

In the same month, OPEC reported an increase in its projection of world oil demand in 2022 by 17 thousand barrels per day to 100.8 million barrels per day, compared to the projection in the previous month's report. Not only that, OPEC revised down the projection of non-OPEC countries' oil supply in 2022 by 60 thousand barrels per day to 66.61 million barrels per day compared to the projection in the previous month's report.

Furthermore, another influencing factor is supply disruptions in the United States. Based on the EIA Weekly report (US Energy Information Administration) also said that there was a decrease in United States stockpiles at the end of February 2022 compared to the end of the previous month, namely gasoline stocks fell by 3.5 million barrels to 246.5 million barrels, distillate stocks fell 3.0 million barrels to 119.7 million barrels.

Meanwhile, for the Asia Pacific region, the increase in crude oil prices was not only caused by these factors, but also the increase in the estimated throughput of 35 combined refineries in China, consisting of the Sinopec, CNOOC, Petrochina and Sinochem Corp refineries, 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. The subsidies have been implemented since January 27, 2022, through an evaluation of the determination carried out every week as an effort by the Government to maintain high retail gasoline prices in the country," explained Agung.

The complete development of the average price of main crude oil in February 2022 compared to January 2022 is as follows:

- Dated Brent rose by 10.97 US dollars per barrel from 87.22 US dollars per barrel to 98.19 US dollars per barrel.

- WTI (Nymex) rose by 8.65 US dollars per barrel from 82.98 US dollars per barrel to 91.63 US dollars per barrel.

- Brent (ICE) rose by 8.53 US dollars per barrel from 85.57 US dollars per barrel to 94.10 US dollars per barrel.

- The OPEC basket rose by 8.83 US dollars per barrel from 85.13 US dollars per barrel to 93.96 US dollars per barrel.