The situation around the Strait of Hormuz is preventing a significant volume of oil from being supplied to the global market, Russian Deputy Prime Minister Alexander Novak said.
"Today, on the sidelines of the World Petroleum Congress taking place in Riyadh, a meeting of ministers, including ministers from OPEC+ countries, was held, at which we discussed the current situation on the global oil market and how the agreement is being implemented. What is important is that we noted that around 6–7 million barrels per day are still not reaching the market from the Strait of Hormuz, and this is indeed significant," he said.
According to him, this creates an imbalance between supply and demand, and serious volatility is also being observed in the market.
"In addition, we discussed in great detail the situation related to the rise in global transportation costs, freight and insurance, which have increased in certain directions by five to ten times," he continued.
"The ministers noted that the bulk of the price increase has been absorbed by the rise in freight and the growth in transportation and insurance costs," the deputy prime minister explained, noting that the price takes into account risks related to the shortage of transportation capacity and the closure of the Strait of Hormuz.
"Therefore, we expressed concern in our statement and agreed to jointly monitor the situation and work with international organizations so that this situation stabilizes," Novak added.