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Novak Says Oil Demand to Gradually Rise in March, April

FILED - 13 April 2015, Berlin: Then Russian Energy Minister Alexander Novak attends an event in Berlin. Photo: Britta Pedersen/dpa-Zentralbild/dpa
FILED - 13 April 2015, Berlin: Then Russian Energy Minister Alexander Novak attends an event in Berlin. Photo: Britta Pedersen/dpa-Zentralbild/dpa
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Novak Says Oil Demand to Gradually Rise in March, April

FILED - 13 April 2015, Berlin: Then Russian Energy Minister Alexander Novak attends an event in Berlin. Photo: Britta Pedersen/dpa-Zentralbild/dpa
FILED - 13 April 2015, Berlin: Then Russian Energy Minister Alexander Novak attends an event in Berlin. Photo: Britta Pedersen/dpa-Zentralbild/dpa

Russia’s Deputy Prime Minister Alexander Novak said on Tuesday there is currently a balance on the global oil market, while demand will be gradually rising in March and April.

Novak’s comments came when asked about the OPEC+ group’s plans for its production policy.

OPEC expects oil demand to rise by 1.34 million barrels per day in 2027, close to the 1.38 million bpd growth expected this year, it said in a monthly report on its website.

The outlook is OPEC's first 2027 projection in its monthly report.

The report forecast demand for OPEC+ crude will average 43 million bpd in 2026, unchanged from last month and close to what OPEC+ produced in December. The organization projected that demand for OPEC+ crude will average 43.6 million barrels per day (bpd) in 2027.

The main growth drivers are expected to be the US, Brazil, Canada, and Argentina.

Novak did not indicate possible decisions for the months following April.

“As shipping and travel intensify, demand will gradually increase starting in March and April. This will be an additional factor to ensure balance,” he noted.

Eight OPEC+ countries on Sunday agreed to maintain a planned pause in their oil output hikes for March.

The eight countries—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—reaffirmed their commitment to oil market stability, based on a stable global economic outlook and healthy market fundamentals reflected in declining inventory levels.

The OPEC+ countries reiterated that the 1.65 million barrels per day (bpd) reduction may be returned in part or in full subject to evolving market conditions and in a gradual manner. The countries will continue to closely monitor and assess market conditions.

Those countries raised output quotas by about 2.9 million barrels per day (bpd) from April through the end of December 2025, equivalent to nearly 3% of global demand.

India and Russian Oil

Separately, the Kremlin said on Tuesday it had heard no statements from India about halting purchases of Russian oil after US President Donald Trump said New Delhi had agreed to stop such purchases as part of a trade accord with Washington.

Kremlin spokesman Dmitry Peskov said Russia was carefully analyzing Trump's remarks on relations with India.

Asked directly if India had decided to stop buying Russian oil, Peskov said: “So far, we have not heard any statements from Delhi on this issue.”

US President Donald Trump announced a trade deal on Monday with India that slashes US tariffs on Indian goods to 18% from 50% in exchange for India halting Russian oil purchases and lowering trade barriers.

Trump announced the deal on social media following a call with Indian Prime Minister Narendra Modi, noting that India would now buy oil from the US and potentially Venezuela.

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Air Freight Rates Soar as Middle East Conflict Blocks Trade Routes

Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)
Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)
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Air Freight Rates Soar as Middle East Conflict Blocks Trade Routes

Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)
Shipping containers are pictured at the UK's largest freight port, in Felixstowe on the East coast of England, on March 12, 2026. (AFP)

Air freight rates have risen by as much as 70% on some routes since the start of the US-Israeli war on Iran, data shows, as the conflict limits flights, blocks some ocean shipments and pushes up jet fuel costs.

Rates on routes between South Asia and Europe have been the most affected by Middle Eastern airspace closures and security issues, industry experts said, after the conflict has stranded more than 100 container ships in the area around the critical Strait of Hormuz oil export corridor.

Products like inexpensive generic medicines from India destined for the European Union, Africa and some Arab countries like Saudi Arabia and the United Arab Emirates typically move on container ships through the strait, said pharmaceutical supply chain expert Prashant Yadav.

"The main shift I’ve heard about involves companies moving generic ‌medicines from ocean ‌freight to air cargo," said Yadav, a senior fellow at the Council on ‌Foreign ⁠Relations.

The shift to ⁠air cargo is significant because air freight handles about one-third of global trade by value, making rate spikes a potential inflationary pressure on goods ranging from fresh food to pharmaceuticals and electronics.

"Customers are shifting freight from ocean to air, however it is extremely expensive - typically 5x to 10x higher - and those costs are climbing as capacity tightens," said Steve Blough, chief supply chain strategist at logistics software firm Infios. "More often, shippers are moving a limited quantity by air to bridge a gap."

JET FUEL PRICE DOUBLES

The jet fuel price has doubled since the start of the conflict, and Danish container ⁠shipping giant Maersk said this week its own air cargo service is now applying ‌fuel surcharges and war risk levies.

The airspace closures have also cut ‌cargo capacity in freighters and passenger planes as airlines take longer routes to avoid the conflict zone, further pressuring rates.

Dubai and ‌Doha are normally among the world's busiest air cargo hubs, but operations at those airports have been ‌severely limited by the Middle Eastern conflict.

Niall van de Wouw, chief air freight officer at transportation pricing platform Xeneta, attributed higher air cargo rates to a "dramatic reduction" in capacity at key Middle East transshipment hubs more than higher fuel prices.

Ronald Lam, the CEO of Hong Kong's Cathay Pacific Airways, said many of its freighter flights to Europe normally stop in Dubai to refuel ‌and pick up more cargo.

"But because of the situation in Dubai, we're now skipping that stopover and we are flying direct from Hong Kong to ⁠Europe with some payload restriction, ⁠because we couldn't uplift fuel in between," he said on an earnings call on Wednesday.

According to an air freight index from freight booking and payments platform Freightos, off-contract spot rates from South Asia to Europe have soared 70% to $4.37 per kg from $2.57 per kg just before the war began.

South Asia-North America rates are up 58% to $6.41 per kg, and Europe-Middle East rates have risen 55% to $2.79 per kg.

A significant share of air cargo exports from South Asia usually travels through Gulf hubs and some has had to reroute through East Asia, said Judah Levine, Freightos' head of research.

"That being said, we have seen the price increases on many of these lanes slow, level off or even decline slightly in the last couple days," he said.

"These trends may reflect Asian and European carriers adding capacity to these long-haul lanes to make up for the missing Gulf capacity, and they may also reflect some of the Gulf carriers - most importantly Emirates - having restarted operations and increasing the number of flights that are now leaving and arriving at these important Gulf hubs."

Business

TotalEnergies Output Down 15%; Operations at SATORP Refinery in Saudi Arabia Are Normal

FILE PHOTO: The logo of French oil and gas company TotalEnergies is seen on a gas station in Drancy, France March 17, 2025. REUTERS/Abdul Saboor/File Photo
FILE PHOTO: The logo of French oil and gas company TotalEnergies is seen on a gas station in Drancy, France March 17, 2025. REUTERS/Abdul Saboor/File Photo
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TotalEnergies Output Down 15%; Operations at SATORP Refinery in Saudi Arabia Are Normal

FILE PHOTO: The logo of French oil and gas company TotalEnergies is seen on a gas station in Drancy, France March 17, 2025. REUTERS/Abdul Saboor/File Photo
FILE PHOTO: The logo of French oil and gas company TotalEnergies is seen on a gas station in Drancy, France March 17, 2025. REUTERS/Abdul Saboor/File Photo

TotalEnergies has lost 15% of its oil and gas output as the US-Israeli war with Iran shuts fields across the Middle East, including in the UAE, Qatar and Iraq, the French oil major said on its investor website.

That output accounts for ⁠about 10% of ⁠Total's upstream cash flow, it added.

Total said its offshore production in the UAE is shut. The UAE produces around half its oil output from offshore fields.

The French firm said income from an $8 per barrel rise in oil prices that has occurred as a consequence of the ⁠war would ⁠more than offset the loss of output in the Middle East this year as it brings online additional production elsewhere.

Operations at its SATORP refinery in Saudi Arabia are normal, it added.

The impact of shutdowns in Qatar of liquefied natural gas production are limited to two million tons of LNG for Total.

Business

Oil Unlikely to Hit $200 a Barrel, US Energy Chief Says

A foreign tanker carrying Iraqi fuel oil damaged after catching fire in Iraq's territorial waters, following unidentified attacks that targeted two foreign tankers, according to Iraqi port officials, near Basra, Iraq, March 12, 2026. REUTERS/Mohammed Aty
A foreign tanker carrying Iraqi fuel oil damaged after catching fire in Iraq's territorial waters, following unidentified attacks that targeted two foreign tankers, according to Iraqi port officials, near Basra, Iraq, March 12, 2026. REUTERS/Mohammed Aty
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Oil Unlikely to Hit $200 a Barrel, US Energy Chief Says

A foreign tanker carrying Iraqi fuel oil damaged after catching fire in Iraq's territorial waters, following unidentified attacks that targeted two foreign tankers, according to Iraqi port officials, near Basra, Iraq, March 12, 2026. REUTERS/Mohammed Aty
A foreign tanker carrying Iraqi fuel oil damaged after catching fire in Iraq's territorial waters, following unidentified attacks that targeted two foreign tankers, according to Iraqi port officials, near Basra, Iraq, March 12, 2026. REUTERS/Mohammed Aty

US Energy Secretary Chris Wright said on Thursday that oil prices are unlikely to reach $200 a barrel, with President Donald Trump touting US gains from higher prices as the war with Iran disrupted traffic through the Strait of Hormuz.

"I would say unlikely, but we are focused on the military operation and solving a problem," Wright told CNN when asked if prices would reach $200 a barrel - a level that an Iranian official said prices could hit if the war further escalates, Reuters reported.

Wright's use of the word "unlikely" was a veiled concession that a spike to $200 was possible, though he repeated that the price jump would be weeks not months.

Brent oil hit all-time highs in 2008 of around $147 per barrel, on tension between the West and Iran over its nuclear program, a weak US dollar, and inflation fears.

This time analysts say oil prices could remain high because of the strait's unprecedented shuttering.

"Get ready for the oil barrel to be at $200 because the oil price depends on the regional security which you have destabilized," Ebrahim Zolfaqari, the spokesperson for Tehran's Khatam al-Anbiya military command headquarters, said on Wednesday.

Wright told CNN: "We're in the midst of a significant disruption in the short term to fix the security of energy flow for the long term." The administration was focused on "pragmatic solutions ... to get through these few weeks of tight energy supply," he said.

Trump wrote in a social media post: "The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money." He said he was more focused on stopping Iran from having nuclear weapons.

On Wednesday, Trump urged oil companies to travel through the strait despite the risks. "I think they should use the strait," Trump said. Asked if Iranian mines were in the strait, he added: "We don't think so."

Wright told CNBC on Thursday that the US Navy cannot escort ships through the Strait of Hormuz now but it was "quite likely" that could happen by the end of the month.

On Wednesday, more than 30 countries in the International Energy Agency agreed to the biggest-ever coordinated drawdown of global oil reserves of 400 million barrels, about 40% of which will come from the United States.

The war has forced Middle East Gulf countries to cut total oil production by at least 10 million barrels per day, about 10% of world demand. The IEA said on Thursday that is the biggest oil supply disruption in the history of the global market.

The US will release 172 million barrels of oil from the Strategic Petroleum Reserve, which Wright on Thursday said would be swapped with more than 200 million barrels that will be put back in the reserve within a year.

Wright told CNBC the energy shortages were less likely to affect the United States and other Western Hemisphere countries. "There's no shortage or even really tight oil market in the Western Hemisphere. The issue's in Asia."

US gasoline prices continue to spike 13 days into the war at an average of $3.60 per gallon, according to AAA. Rising oil prices are also likely to boost the costs of other goods, with the closed strait also stalling shipments of fertilizer ingredients and likely raising prices on household items that could hit consumers for months.

Trump had campaigned on lower gasoline and other prices, with Americans set to vote this November in midterm elections that will decide whether his fellow Republicans keep control of Congress.