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After the start of the Russian-Ukrainian war, oil prices soared, will it affect the chemical industry?

The international oil price has exceeded $100 per barrel for the first time in 8 years. As of press time, the price of Brent crude oil has soared to $102 per barrel!

The severe Ukrainian situation has made the already tense energy supply and demand relationship worse, with European natural gas futures prices soaring 40%, affected by the escalation of the situation in Russia and Ukraine.

Major stock index futures in Europe and the United States all fell by more than 1%; Hong Kong stocks Hang Seng Index fell more than 2.5%, A-share Shenzhen Component Index and ChiNext Index fell more than 1%.

The A-share oil and gas sectors pushed higher during the session on the 24th, and Hengtaipu’s “20cm” daily limit. Precious metal concept stocks continued to rise, and many stocks such as Western Gold rose by the daily limit.

Gasoline prices are displayed at a gas station in California, U.S., February 23, 2022.

Russian President Vladimir Putin signed an order on the evening of February 21, 2022, recognizing the “Donetsk People’s Republic” and “Luhansk People’s Republic” in eastern Ukraine. Oil prices are climbing on fears that the Ukraine-Russia crisis will disrupt global oil supplies. The price of international benchmark Brent crude oil reached a seven-year high of US$97.76 (equivalent to 619.7886 yuan) a barrel on the 22nd. Asian shares ended lower as U.S. and European bourses braced for losses. Several Western allies, including Britain, have threatened to impose sanctions on Russia. Russia is the second largest oil exporter after Saudi Arabia and the world’s largest producer of natural gas.

Russia’s crude oil is trading at a discount, one of the largest in years, as traders worry about the unfolding crisis in Ukraine, Al Jazeera’s website reported on February 22. The trading arm of Trafigura and Lukoil both sold Urals crude at $6.30 a barrel below spot Brent, the report said. That’s the biggest discount in at least 11 years, according to data compiled by Bloomberg. Surgut Oil and Gas also previously sold crude for Europe at $6 a barrel below spot Brent. This is the latest example of a sharp drop in the relative value of Russian oil shipped to Europe over the past few weeks. Traders have been closely watching what major steps the United States and its allies will take to disrupt Russian oil exports. ‍

“After many European refineries have previously bought in large quantities, those selective refiners now seem to be shunning Urals crude,” Fischer Global Energy Consulting wrote in a report. The report said the weakness in Russian crude was related to the Most other spot markets are the opposite. In addition to the tensions, Urals prices are facing a host of market-related headwinds, the report noted. The processing of Urals crude is also relatively energy-intensive, making it less attractive to some refiners. The cost of hydrogen at these refineries has also risen sharply due to higher natural gas prices. In the U.S., there are already signs that companies are looking for alternatives to Russian oil, and Asian traders are also said to be worried about being drawn into possible trade sanctions against Russia. The price of Urals also depends on supply, the report said. Russia is poised to boost Urals crude exports from western ports to a 23-month high in March. Meanwhile, four major European oil traders said on Tuesday that Russia’s crude exports should remain largely unchanged due to the tightness of the market and Europe’s reliance on Russian supplies.

The rise in prices of bulk products such as petrochemicals is an inevitable result. May affect my country’s refining and chemical integration projects. According to statistics from Longzhong Information, from 2018 to 2022, domestic refining capacity will continue to rise, especially the growth of private refining capacity will be very obvious. It is expected that a processing capacity of about 100 million tons will be put into production. It will reach about 980 million tons, and the annual crude oil processing volume will reach about 700 million tons. If my country’s annual crude oil output of nearly 200 million tons is excluded, that is to say, after the completion of these projects in 2022, my country’s annual excess oil refining capacity will be about 780 million tons. According to the calculation of my country’s imported crude oil of 500 million tons in 2021, the national If the refinery is running at full capacity, it will need to import nearly 300 million tons of crude oil. 300 million tons of crude oil? What a forex outlay this would be! Therefore, for the current domestic refining and chemical integration projects, the raw material side will definitely be greatly affected, and the main products of refining and chemical integration projects are different from traditional refineries. They mainly produce downstream chemicals, so downstream The chemical market will also have a certain degree of impact.

Third, the rise in oil prices has played a major role in promoting my country’s energy transformation, vigorously developing clean energy, and achieving the dual-carbon goal. Reducing the dependence on crude oil and increasing the proportion of clean energy use has always been one of the energy strategies pursued by my country. Especially in recent years, with the implementation of the dual carbon goal and the pressure of environmental protection and energy consumption, the transformation and upgrading of the energy and chemical industry has been It is imminent, and external geopolitics pushes up oil prices, which is likely to force the pace of domestic industrial upgrading. Long-term pain is not as short as short-term pain, prompting domestic enterprises to develop and progress in the direction of cleanliness, high efficiency and low consumption.

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