Tight Oil Supplies and Geopolitics Fuel Global Market Uncertainty

Global oil markets remain under pressure due to tight physical supplies and geopolitical developments. Pulkit Agarwal, Global Director of India Content at S&P Global Energy, warned that continued disruptions in oil supplies from producing countries could further widen the existing supply deficit.

Agarwal noted that supply-side challenges have affected global oil and gas markets for over six months, causing oil prices to fluctuate. He stated that some oil is still flowing through the Strait of Hormuz, but the global market remains tight due to physical oil supplies remaining tight, particularly in refined products like diesel.

Agarwal emphasized that oil prices are influenced by multiple factors beyond current supply, including demand response and future expectations. He also highlighted India's reliance on Russian oil since the Russia-Ukraine conflict began in 2022 and the difficulties of removing a major supplier when physical markets are tight.