PRICE UPDATE: Crude prices tumble after Ukraine President Zelenskiy says Ukraine is prepared for certain compromises while the UAE pushes for OPEC+ output increase and Iraq says it can increase output if OPEC+ requires

Reaction details (18:00)

• After the Zelenskiy commentary Brent May 22 futures hovered around USD 119.00/bbl and selling pressures started gradually at 12:25 EST, with Brent falling to USD 117/bbl at 12:30 EST as the Iraq commentary began to cross. The move amplified thereafter heavily to print lows of USD 105.60/bbl at 12:35EST although the move pared to the USD 113/bbl region five minutes after. 

Analysis details (17:52)

• So far, OPEC has suggested the recent price rally in crude is not due to supply issues but the geopolitical risk and have thus resisted any output increases and have stuck to the agreed 400k BPD monthly output hike. The remarks from the UAE are the first to suggest a potential production increase saying they are in favour of an increase and will encourage OPEC to consider higher output. Iraq followed stating they can increase output if OEPC+ requires, noting it has about 6% of production as spare capacity.


• Also adding to the downside is the remarks from Ukraine President Zelenskiy, who said they are prepared for certain compromises - we are yet to see further details on what these compromises will be, but Ukraine and Russia are set to hold talks in Turkey on Thursday. Note, a Zelenskiy aide earlier in the session said they are ready for a diplomatic solution but they will not trade a "single inch" of territories.


• The Kremlin on Monday stated Russia told Ukraine it can halt operations at any moment if Kyiv meets their conditions. The conditions are that Ukraine must amend the constitution and reject claims to enter any bloc. It also called for Ukraine to recognise Crimea as Russian and Donetsk and Luhansk as independent states. If these conditions are met then Russian military action will stop in a moment.

09 Mar 2022 - 17:41- EnergyGeopolitical- Source: Newswires