Impact Of Russian-Ukrainian Political Tension, Government Sets ICP Price At 95.72 US Dollars/Barrel

Illustration. (Photo: Doc. Antara)

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) has decided to fix the Indonesian Crude Price (ICP) to 95.72 US dollars per barrel. This amount increased by 9.83 US dollars from 85.89 US dollars per barrel in January 2022.

Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Tutuka Ariadji, said that the escalation of Russia-Ukraine tensions and the start of the Russian invasion of eastern Ukraine added to concerns that global energy supplies would be increasingly disrupted in a time of tight markets. These developments pushed up the average price of major crude oil on international markets in February 2022.

"Based on the February 2022 IEA (International Energy Agency) report, there is 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 of COVID-19 restrictions," Tutuka wrote in his statement to the media, Wednesday, February 2.

Furthermore, Tutuka explained, based on the OPEC report in February 2022, there was an increase in the projected 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.

Furthermore, regarding oil supply, based on the OPEC Report in February 2022, there is a downward revision in 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.

Based on the IEA Report in February 2022, there is an increase in the OPEC+ supply gap against the promised target of up to 900 thousand barrels per day in January 2022. Also, there is a threat of closing Libyan exports from Marsa el-Hariga Terminal (capacity of ±200 thousand barrels per day) if demand for payments from oil workers is not met, and a potential decline in exports due to bad weather.

"There was a supply disruption in the United States in early February 2022 due to a winter storm," Tutuka said.

The increase in prices was also influenced by oil stocks where based on the IEA Report for February 2022, preliminary data, there was a decline in industrial stocks in OECD countries in February 2022 by 13.5 million barrels from 2860 million barrels in January 2022.

Then based on the EIA Weekly Report (US Energy Information Administration), 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 troughput of 35 combined refineries in China, consisting of the Sinopec, CNOOC, Petrochina and Sinochem Corp refineries, in February 2022 by 3.2% 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 evaluation of determinations carried out every week as an effort by the Government to maintain high retail gasoline prices in the country," concluded Tutuka.