Did Russian oil come to save the market? The Black Sea port resumed loading and the soaring oil prices welcomed a "cooling valve".

The latest ship and freight tracking data shows that the key energy export terminal in Novorossiysk, a port in the Black Sea of Russia, the Sheskharis oil terminal, resumed loading activities over the weekend. This brings significant relief to the global energy supply market as tensions in Middle East geopolitics continue to escalate. If the easing of restrictions on Russia by the Western world continues to expand, it could be seen as a phase of cooling energy prices and significantly easing expectations of inflation. According to compiled shipping tracking data from institutions, Russia's supertankers Psara I and Hanuman are currently docked at the first and second berths respectively. Based on the latest information from the public port agency platform, the Briont ship is also docked at the seventh berth. It is understood that the "first, second, and seventh berths" essentially refer to specific loading/docking positions within the terminal. Ships docked at these berths are not waiting in the open sea, but have already docked at designated positions within the terminal, usually corresponding to preparing for loading, currently loading, or post-loading operations. For Russia's large oil terminals, berth numbers indicate which loading position is undergoing significant transport work. The latest ship and freight tracking data suggest that Sheskharis terminal has at least several loading positions back in operation. With several major oil-producing countries in the Middle East (including Saudi Arabia) reducing production in recent days due to near blockage of the Strait of Hormuz, the resumption of transportation flow at this crucial large oil facility in Russia has alleviated some pressure on the global oil supply. Media reports citing informed sources have revealed that with the critical Strait of Hormuz essentially blocked by the Iranian military, and Middle Eastern oil-producing countries such as Saudi Arabia tend to completely fill their oil tanks, Saudi Arabia, being the largest oil producer in the region, has started to cut overall oil production including crude oil. This move by the world's largest oil exporter is following in the footsteps of the UAE, Kuwait, and Iraq. With a new round of Middle East warfare nearly closing off the narrow waterway connecting the Persian Gulf to the open sea - the vital global maritime energy transportation hub - the Strait of Hormuz. Latest statistics show that Saudi Arabia, the world's largest oil exporter, produces approximately 10 million barrels of oil per day and exports about 7 million barrels per day, far exceeding major oil producing countries such as Russia and the United States. While the U.S. has become the largest oil producer in the world, due to its massive domestic consumption, its net exports are still lower than those of Saudi Arabia. Russia, as the second largest exporter, is limited by geopolitical factors and sanctions affecting the stability of its exports. As of the time of writing, with the catalyzing news of Russian oil entering the market, international crude oil benchmark Brent crude futures prices have risen by over 10%, remaining above the important $100 per barrel mark, but the increase has significantly narrowed. The main reason for this is that after the interruption of oil and gas transportation in the Strait of Hormuz, major oil-producing countries in the Middle East are cutting production. The early price hike in oil prices marks the largest single-day increase since April 2020, and the highest oil price level since June 2022, continuing the 27% increase from the previous week. Oil prices briefly soared to near $120 per barrel on Monday, nearly an 80% increase since the outbreak of the Iran war, which the market immediately interpreted as a "higher inflation + more pessimistic economy" stagflation impact. According to media reports, an informed source familiar with the details had stated a week ago that the Sheskharis oil terminal had been closed since being attacked last Monday, with six of its 8 large loading berths hit by a new round of Ukrainian drone attacks. Transneft PJSC, the Russian oil pipeline operator that operates the terminal, did not immediately respond to media requests for comments. Currently, with tracking data showing ships at the 1st, 2nd, and 7th berths, it indicates that at least some of the damaged facilities outside those berths have been restored, and Russia's oil export chain is beginning to move again after the loosening of energy sanctions by the United States against Russia. The resumption of port operations is not just a promise, but actual vessels are already operating at specific berths. Earlier reports on March 8 stated that Trump administration officials began to defend a 30-day temporary waiver that allows India to continue buying Russian oil, officially in order to ease global market pressure, suppress soaring oil prices, and alleviate fears of shortages. If the U.S. government continues to expand this "limited easing" on Russian oil, it could indeed constitute a phase of cooling in energy prices and marginally ease expectations of inflation, as the logic behind it is simple: the market's current biggest fear is a decrease in Middle East supply, disruption in shipping, and insufficient alternative oil and gas; and Russia is one of the few systems that can provide additional circulating crude oil in the short to medium term. Media reports have indicated that senior U.S. officials have explicitly stated that such waivers can help "restrain panic about shortages" and "curb price hikes." From a trading perspective, this policy does not fundamentally change the supply-demand balance, but compresses geopolitical risk premiums and panic premiums; therefore, it is more likely to significantly reduce oil prices from their recent extreme highs and weaken the market's worst pricing of the "oil price - inflation - no rate cut/more rate hikes - stagflation" chain, but may not be enough to completely reverse the current stagflation trading.