© TASS

Prices remain high in the world oil market: on May 27, a barrel of Brent benchmark rose to $118 during exchange trading. This brings contentment and bliss to global exporters, as well as discomfort and anxiety to importers. The US authorities are getting particularly alarmed.

The matter at hand is not only permanent public speeches by White House officials stating the issue of high prices in the country (the average gasoline price in the United States reached a historical record of $4.6 per gallon) and their ridiculous statements about Russia's fault in the current domestic fuel situation. The matter at hand is also secret Washington-initiated talks with Riyadh reported by the Axios portal on May 25. According to the information resource, the National Security Council Coordinator for the Middle East and North Africa Brett McGurk and State Department’s Senior Advisor for Energy Security Amos Hochstein were assigned by US leader Joseph Biden to hold secret negotiations with the Saudi authorities on their ability to raise the bar for oil production. The visitors arrived in the kingdom on May 24, Axios claims, though the White House press service has yet to confirm this information.

However, the Saudis will hardly make concessions. They are on the winning side ˗ as oil prices rise, the Europeans are ready to overpay for supplies. So "bringing down" the market is senseless. In case oil demand starts growing, OPEC+ may still revise its production targets in favor of growth, not radically. And this won’t jeopardize Russia’s fuel and energy complex.

Surprisingly, the Biden administration, along with calls for local oil companies to drive up production, simultaneously revokes their mining licenses (some Republican US senators say Biden's course to reduce the extraction of fossil energy resources within the country has entailed a reduction in the number of drilling permits), demands explanations for the suspension of oil refineries over preventive maintenance, and actively advances the country’s commitment to the "green" course.

Meanwhile, European bureaucrats cannot stop discussing the sixth package of EU sanctions stipulating an oil embargo on Russian oil. The White House is advocating for the most rapid progress. Still, this is also a trap for Washington, as the embargo will only speed up global oil prices the US authorities seek to contain. That is, Western efforts to strangle Russia with sanctions obviously lack a clear strategy, with restrictions harming the authors themselves. Therefore, “prohibition emitters” often look around not to harm themselves with package initiatives targeted against the Russian Federation. For instance, May 27 saw Bloomberg report that the European Union might make an exception for the Druzhba oil pipeline when imposing an embargo on Russian oil supplies so as to give Hungary time to rebuild its energy system. It is apparently due to Budapest's recent compensation request worth of $15-18 billion, which the country's authorities seek from the EU for its agreement to support the Union’s centralized waiver of Russian oil.

Yet, the sixth package is maturing. And there is almost no doubt that an oil embargo will take place after all, in one guise or another. Therefore, Russia is busy diversifying its exports. The key direction is APR countries. Russia’s weekly oil export to Asia (in the third decade of May) exceeded the volume of supplies to Europe, Kpler company announced. God bless the Russian Federation’s opportunity to grant allowances to counterparties. After all, global oil prices are only getting accelerated, including over a possible European embargo. So, domestic suppliers will keep expanding infrastructure capabilities and improve logistics in order to promote the process of redirecting hydrocarbon supplies to Asia.

Forecast background for the global oil market features a bet on further price progress. A breakthrough may follow in case of reduced Russian oil exports, which is the current stance of the Bank of America (BofA). The bank's analysts suggest that risks of a sharp reduction in Russian oil exports over the European Union’s tighter sanctions plans may evoke a severe oil crisis, with Brent prices skyrocketing above $150. And among the relevant drivers BofA mentions the US summer gasoline consumption increase and reduction of the country’s commercial reserves. In fact, a gallon may get even more expensive in the coming weeks, as the summer tourist boom brings more and more road trip fans to the gas stations.