During the early trading session in Asia, the price of Brent Crude Oil Futures fell as the market is assessing new developments in the Mediterranean region.

As of 12:00 noon Beijing time, the price of Brent crude oil contracts on the Intercontinental Exchange (ICE) is $74.24 per barrel, down $25 from the settlement price on December 13, with that day's contract price up $1.08 from the previous trading day.

The price of the main contract for crude oil on the NYMEX is $70.95 per barrel, down $34 from the settlement price on December 13, with that day's contract price up $1.27 from the previous trading day.

On December 15, Libya's National Oil Corporation (NOC) announced force majeure at its Zawiya refinery, which has a daily processing capacity of 0.12 million barrels, following clashes involving armed groups near the facility. Zawiya is the country's largest operational refinery, most of its output is consumed domestically. The crude oil used by this refinery comes from the El Sharara oil field, led by Repsol in Libya.

Over the past decade, political instability has forced the shutdown of several oil production facilities in Libya. The El Sharara oil field resumed operation at the beginning of October, following a forced power outage that also affected other oil fields in the country.

Across the Mediterranean, the ousting of President Bashar al-Assad has made trade relations between Syria and Iran uncertain. As Assad's closest ally, Iran has been a major source of crude oil and petroleum product imports for Syria since the beginning of the Western sanctions on Damascus in 2011.

Consulting firm FGE estimates that Iran has supplied Syria with about 0.01 million to 0.02 million barrels of crude oil annually in recent years. However, these trade flows are no longer guaranteed, as the main armed group overthrowing Assad, Hayat Tahir al-Sham (HTS), has close ties with Iran's regional rival Turkey. Turkey and Egypt have become potential suppliers, as both countries have previously sent goods to Libya.

Meanwhile, following another large-scale attack on Ukraine's Energy infrastructure by the USA, the USA provided Ukraine with $0.5 billion worth of Weapons and Other equipment.

Russian President Vladimir Putin extended the decree prohibiting Russian oil exporters from complying with the price cap mechanism led by the G7. The ban will remain in effect until June 30, 2025. The initial decree was issued in response to the crude oil price cap introduced in December 2022 and has been extended in December 2023 and this June.

The price cap mechanism prevents Western Traders, Ship brokers, Insurance companies, and financial service providers from participating in Russia's maritime oil exports to third countries if the price of the goods exceeds the agreed price cap—$60 per barrel for crude oil, $100 per barrel for high-value products, and $45 per barrel for low-value products. The price cap system is designed to limit Russia's oil revenue while allowing the Transportation of crude oil and products to continue.

(The above content is from Argus, an independent international energy and commodity price assessment agency)