If the US lifted one of the key sanctions against Russia – the ban on the sale of Russian oil – will this be felt in fuel prices? And how does the war in the Middle East affect the global economy and the Bulgarian market? Professor Assen Assenov, a lecturer at the American University in Washington, spoke to bTV on these topics.
The measure for Russian oil will apply to tankers loaded by March 12, with the period until April 11. According to Prof. Assenov, the temporary easing of sanctions may increase the supply of oil, but the effect on the market will not be decisive.
„These sanctions will ease market demand, of course, as they will offer more oil. But let's not forget that the Russian oil industry itself is in a difficult situation - firstly with the ships, and secondly, because during the years of sanctions it was not renewed.“ According to him, the oil market remains very tense, and the main unknowns are political decisions and the development of the conflict in the Middle East.
“The market is certainly tense. The big unknowns are the decisions of Donald Trump and what the response from Iran will be.“ According to him, Russia will not significantly change the balance of the market.
“Russia will not help significantly. It will mostly help itself and will actually become the biggest winner from this war.“ The question of whether Bulgarian consumers will feel the price of fuel drops, however, remains with a rather pessimistic answer.
„My check of fuel prices in Bulgaria shows that the increase here is far less than in the US, which is self-sufficient. My expectations are that this will not happen soon. Rather, the risk of prices increasing is greater.“ The professor predicts that the price of oil may increase significantly. “Expectations are that the price of a barrel of oil may reach 125-150 dollars.“ The reason is the tension around the strategic Strait of Hormuz and military actions in the region.
„Until there is demining and a solution to the problem in this strait, things will not improve.“ Even increased exports from Russia and Saudi Arabia will not be enough to calm the markets. “These quantities are not enough to calm the markets.“ If the conflict continues, the increase in fuel prices could be felt in Europe as well. “I assume that fuel prices could go up by at least 10 to 15 percent.“
According to him, a short-term calming of the market is not expected. “There will most likely be no calming of the markets in the next week or two until some agreement is reached.“
Prof. Asenov also commented on Donald Trump's statements that Iran has been defeated and is seeking an agreement. “Donald Trump's job is to calm the markets. What will happen on the ground in the coming days is too early to predict.“ He nevertheless expressed hope for a diplomatic solution. “God forbid that Iran agrees to concessions and some agreement is reached.“