Oil surges as U.S. bans Russian crude, Britain to phase out purchases

  Oil prices settled around 4% higher on Tuesday as the United States banned Russian oil imports
  and Britain said it will phase them out by year end, decisions expected to further disrupt the
  global energy market where Russia is the second-largest exporter of crude. 

  Oil prices have surged more than 30% since Russia invaded Ukraine, and the United States and
  other countries imposed a raft of sanctions. Russian oil and gas exports were already being
  shunned before the ban as traders sought to avoid running afoul of future sanctions. 

  U.S. President Joe Biden announced a ban on Russian oil and other energy imports. Britain said
  it will phase out the import of Russian oil and oil products by the end of 2022, giving the market
  and businesses time to find alternatives. Read more

  Brent crude futures settled at $127.98 a barrel, 3.9% higher, while U.S. crude futures settled at
  $123.70 a barrel, a 3.6% increase. 

  Russia ships 7 million to 8 million barrels per day of crude and fuel to global markets. European
  allies are not expected to join the United States in the ban, but major buyers there are already
  shunning Russian oil. Shell, the one notable major that did buy Russian crude, faced a torrent
  of criticism, including from Ukraine's foreign minister. On Tuesday, Shell said it would no longer
  buy Russian oil. 

  The disruption could ripple through other energy markets, as Russian oil and products are used
  for refining into other goods. Read more

  "We are at the beginning of that shockwave in energy markets," said Roger Diwan, vice president
  of financial services at S&P Global. 

  U.S. Energy Secretary Jennifer Granholm said after the sanctions announcement that allies were
  not under pressure to ban Russian oil. 

  "We don't rely that much on Russian oil and we don't rely on Russian gas at all. We know that our
  allies across the world may not be in that same position. And so we are not asking them to do the
  same thing," Granholm told CNBC in an interview. 

  Despite the small size of U.S. imports from Russia, the ban is "one more source of supply loss,"
  said Matt Smith, lead oil analyst at Kpler. "It's just one more escalation in a series of events that
  have pushed crude and product prices higher," Smith added. 

  Before the ban was announced, Goldman Sachs raised its Brent forecast for 2022 to $135 from
  $98 and its 2023 outlook to $115 a barrel from $105, saying the world economy could face the
  "largest energy supply shocks ever" because of Russia's key role. Read More 

  Many buyers were already avoiding Russian oil. Shell PLC (SHEL.L) said it would stop all spot
  purchases of Russian crude after drawing criticism for a purchase made on March 4. Read More 

  Expectations have dimmed for an imminent return of Iranian crude to global markets, adding 
  upward pressure on prices as talks have slowed between Tehran and world powers. Read More 

  The supply disruptions have prompted widespread calls for higher output from oil producers. 

  Mustafa Sanalla, head of Libya's state-run National Oil Corp, said the country's production is
  currently 1.3 million barrels per day and will reach 1.5 million barrels by year-end. 

  API data showed a surprise increase of 2.8 million barrels in U.S. crude stocks for the week
  ended March 4, according to sources. 

  Source: Reuters 

  Government to abolish quarantine requirement starting April 1 

  The Indonesia Government is considering to waive the quarantine requirement for all international
  traveler starting April 1. 

  The plan is a follow up to the piloting of the policy to waive quarantine requirements to
  international travelers holidaying in Bali that began on Monday, March 8, 2022. 

  “Should the trial succeed, then we will waive abolish quarantine requirement for all international
  travelers starting April 1, 2022, or earlier,” said Coordinating Minister of Maritime Affairs and
  Investment Luhut Binsar Pandjaitan, as quoted from an official press release. 

  He said daily confirmed cases of COVID-19 had been on a downward trend throughout all 
  provinces in the islands of Java and Bali. Bed occupancy rates and death rates were also on
  the decline, though there were still areas with rising bed occupancy rates, such as Yogyakarta. 

  For Java and Bali, numerous regencies and cities have re-entered PPKM level 2, the second 
  lowest level of the country’s lockdown policy. Among these areas are the Jabodetabek
  agglomerated area and Surabaya Raya. 

  Meanwhile, Coordinating Minister of Economic Affairs Airlangga Hartarto said the government
  were currently preparing a policy for international travelers in areas outside of Java and Bali. 

  “Herewith, I would also like to say that the travel bubble policy has been prepared. We would also
  reimplement Visa-on-Arrival for those traveling to Batam and Bintan,” he said. 

  In addition, he said the West Nusa Tenggara (NTB) province was ready to host the MotoGP
  Mandalika 2022 on March 18-20. Based on the latest data, the PPKM level in NTB has reached
  level 1 and the government has prepared all the necessary requirements in regards to health
  protocols and related facilities.  

  Source: Bisnis

  Indonesia tightens palm oil export curbs in new hit to global supplies  

  Indonesia will further restrict exports of palm oil from Thursday to increase domestic supplies,
  as authorities ramp up efforts to contain a surge in cooking oil prices, Trade Minister Muhammad
  Lutfi said. 

  The world's biggest producer and exporter of palm oil will require companies to sell 30% of their
  planned exports of crude palm oil and olein at home, up from 20% currently, under a scheme
  known as Domestic Market Obligation (DMO). The new restriction will stay in place for at least
  six months. 

  The tightening of restrictions will remove more vegetable oil from a global market already suffering
  a squeeze in supplies after Russia's invasion of Ukraine, which is a key global supplier of
  sunflower oil. 

  "We increase this DMO to ensure that all parts of the domestic cooking oil industry can function
  properly," Lutfi told a news conference. 

  The increase to 30% would last for at least six months, "after which we can review whether it
  needs further expansion or adjustment," he said. 

  Along with export volume restrictions, the government also set the maximum prices for CPO and
  olein sold to local refiners and put a cap on retail prices. 

  The latest policy changes could remove around 100,000 tons of palm oil per month from world
  markets, according to Anilkumar Bagani, research head of Mumbai-based vegetable oils broker
  Sunvin Group. 

  Malaysian benchmark palm futures surged by 10% after the announcement. 

  Indonesia first restricted exports in late January after prices of cooking oil - made from refined
  crude palm oil - rose more than 40% at the start of the year amid a surge in global prices. 

  Although the policy has increased supply at home, consumers have complained that cooking
  oil is still being sold at prices above the 14,000 rupiah ($0.9739) per litre cap in traditional
  markets, Indonesia's Ombudsman said. 

  Meanwhile at supermarkets, cooking oil stocks are running out even with most retailers setting
  a two-liter quota per buyer. Some stores are even asking buyers to dip their fingers in ink, as is
  required during elections, to mark that they have purchased their daily quota. 

  Lutfi said authorities wanted cooking oil prices to be in line with the new cap before the start of
  Islamic fasting month of Ramadan in April. 

  Satria Sambijantoro, an economist with Bahana Securities, questioned whether the price controls
  would work effectively. 

  "From the supply-side, the price control would discourage manufacturers to produce cooking oil,"
  said Satria, who added that on the demand side consumers would be encouraged to hoard
  supplies and that could result in price inflation. 

  Lutfi said the new requirement would remain in effect until cooking oil is readily available at local
  markets and was not offered above a maximum retail price set by the government. 

  Indonesia's biggest palm group GAPKI was "caught by surpise" by the latest move as the
  group had urged the government to keep regulations unchanged until after Ramadan, deputy 
  chairman Togar Sitanggang told an industry conference in Kuala Lumpur. 

  Since Indonesia started restricting palm exports in late January, the trade ministry has issued
  permits to allow 2.77 million tonnes of exports, Lutfi said, estimating domestic sales at
  around 573,890 tonnes. 

  Source: Kontan