Rystad Energy Warns Of Rising Oil Market Pressure As Freight Rates Double

(MENAFN- Trend News Agency) BAKU, Azerbaijan, October 26. Attacks on Saudi Arabia's infrastructure and reduced supplies through the Strait of Hormuz are putting increased pressure on oil markets, while freight rates on the Yanbu–Ningbo route have doubled since early September.

According to a press release from Rystad Energy, the company's chief economist, Claudio Galimberti, made this statement while presenting an overview of the situation in global energy markets and noting the impact of disruptions in oil supplies, rising transportation costs, and inflationary pressures on the global economy.

"The pressure on oil markets stems from both supply disruptions and rising transportation costs. Attacks on Saudi Arabia's infrastructure and reduced flows through the Strait of Hormuz are limiting supply, while freight rates on the Yanbu–Ningbo route have doubled since early September, increasing the cost of shipping oil to Asia,” Galimberti noted.

According to him, a significant drop in diesel prices in the U.S. is not expected in the near future. As a result, the cost of energy is becoming one of the politically sensitive issues ahead of the U.S. midterm congressional elections, which will take place in November.

“Central banks are also facing a difficult situation: raising interest rates cannot restore disrupted oil supplies, while rising energy costs are fueling inflation.

This week's economic data and central bank decisions will provide an opportunity to assess the resilience of the global economy amid ongoing disruptions in energy supplies. At the same time, earnings reports from major technology companies will show whether investments in artificial intelligence are yielding sufficient returns," the company reports.

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