The price movements affecting crude oil have been fascinating over the past year and a half.
During the period in which many Western governments imposed lockdowns on their population, oil was trading at relatively high prices because of logistical and supply chain difficulties created by enforced stay-at-home orders, whilst nations in Asia such as India, Thailand and Japan continued as normal and required as much of the thick black stuff as possible to keep the wheels of industry turning.
Once the folly of lockdowns had tested the patience of most of the Western world and the powers that be could no longer carry them out, everything suddenly went back to normal, but supply chain disruptions continued as the 'work from home' phenomenon was difficult to curtail.
Prices remained relatively high. However, in the early months of 2022, many of the same countries that imposed lockdowns began to band together to enforce trade sanctions on the Russian Federation and its industry.
One of the largest industries in that particular country is oil extraction and refinement and the production of oil-based energy products.
Indeed, Russia is an OPEC+ nation and one of the largest producers and exporters of petrochemical products in the world.
These sanctions meant that Russian oil companies could not access their bank accounts in which settlement for oil supply is made; hence many European customers had to begin to settle the supply of oil by Russian companies by paying in Rubles into a bank account in Moscow or face having their supply curtailed.
More info: blog FXOpen
