Russian oil: Morocco faces growing global demand

At the height of the summer season, Moroccans are facing a third increase in diesel prices since the beginning of August, the latest of which came into effect on Thursday. This price increase translates into a 35-centime rise in the price of a liter of diesel, to 12.50 dirhams, while the price of a liter of gasoline will remain in the 14.50 dirham range.  
 World crude oil 
prices rose in July and August as a result of Saudi Arabia’s production cuts. According to the IEA, this enabled Russia to ship crude by sea at a weighted average of $64.41 a barrel, above the $60 ceiling agreed by the G7. 

 “Tightening physical balances in the wake of Saudi production cuts and lower Russian loadings have given further impetus to the price rebound, pushing crude futures curves further into deportation,” said the IEA in its monthly oil market report. 

 The researchers also noted that higher crude prices, combined with reduced discounts for Russian grades, boosted Russia’s export revenues by $2.5 billion to $15.3 billion over the month. 

 This figure is still some $4.1 billion below the levels achieved at the same time in 2022. According to the IEA, Russia’s oil exports averaged 7.3 million barrels per day in July. 

 Oil consumption is well on the way to an all-time record: the IEA is revising upwards its forecast for global demand growth in 2023, which is heading for its “highest level ever recorded” before a slightly slower rise in 2024. Never has the world been so greedy for oil. Without waiting to draw up an annual balance sheet, world oil demand has already “reached a record of 103 million barrels per day (mb/d) in June, and August could see a new peak”, points out the Paris-based OECD agency in its monthly report published on Friday. 
 Global demand growth is being driven by summer air travel, increased use of oil (fuel oil) for power generation and a surge in Chinese petrochemical activity”, explains the IEA. For the year as a whole, global demand for black gold “is expected to increase by 2.2 million barrels (mb/d) per day” compared with 2022 “to reach 102.2 mb/d in 2023, with China accounting for more than 70% of growth”, says the agency. 

 This is the “highest annual level ever recorded”, according to the IEA, which in February was already forecasting a record for the current year, of 101.9 million barrels per day, after 99.9 mb/d in 2022 and 97.6 mb/d in 2021. 

This thirst for oil comes against a backdrop of market tensions following drastic supply cuts decided by several countries in the OPEC+ alliance, made up of 13 oil-exporting member countries and 9 allies, to support prices. As a result, global oil supply fell by 910,000 barrels per day to 100.9 mb/d last month. 

 The “sharp reduction in Saudi Arabian production in July pushed OPEC+ bloc output down by 1.2 mb/d to 50.7 mb/d”, “close to a two-year low”, while “non-OPEC+ volumes rose by 310,000 b/d to 50.2 mb/d”, according to the IEA. 

 Nine OPEC+ members, including heavyweights Riyadh and Moscow, have introduced voluntary production cuts totaling 1.6 million b/d since May. These cuts were subsequently extended until the end of 2024. At the same time, Saudi Arabia opted for a further production cut of one million barrels/day for July, extended to August and then to September. Moscow, for its part, pledged to cut its exports by 500,000 barrels/day in August, then by 300,000 barrels/day in September. 

In the case of Morocco, experts believe that an FTA with Russia could make a significant contribution to lowering the price of petroleum products in Morocco. While oil business is currently brisk between Rabat and Moscow, a possible FTA could give Morocco “greater access to Russian oil products, in particular from Russian refineries that are capable of producing cheaper, low-sulfur oil products in line with Moroccan specifications”, reports Anas Abdoun, Senior Analyst Africa & Middle-East at Stratas Advisors in the August 8, 2023 issue of L’Opinion, adding that the dividends for the agricultural sector are countless.   

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