Oil prices experienced a rise this morning following Israel’s warning to Palestinians living in Rafah to evacuate the city, signaling a potential impending assault. Brent crude saw a nearly 1% increase, climbing above $83 as investors contemplated heightened conflict in the region. Last week, prices had dipped as traders factored in reduced geopolitical risks linked to the Middle East.
The boost in oil prices comes as Russia’s oil revenue doubled in April compared to the previous year, reaching around $11.5 billion. This surge can be attributed to higher prices, with a barrel of Urals crude increasing from approximately $50 last April to over $70, as well as a weaker ruble influencing sales.
Moreover, Shell and the government of Alberta are facing criticism due to the revelation that Shell was able to claim millions of carbon credits for emissions reductions that did not actually occur, thanks to a government subsidy program. From 2015 to 2021, Shell managed to secure 5.7 million credits that did not correspond to any actual CO2 emissions reductions. Environmentalists have labeled these offsets as phantom credits that worsen climate change, contrasting with arguments from Shell and the government that they incentivized the carbon credit market.
The energy sector is also witnessing significant advancements, with Microsoft recently striking a major deal with Swedish energy company Stockholm Exergi to acquire carbon offsets, which the companies hail as the largest commitment of its kind. The agreement entails Stockholm Exergi providing 3.33 million tons of permanent carbon removals starting in 2028 through a biomass-burning facility that captures and stores carbon dioxide emissions underground.
In light of these developments, ongoing tensions in key regions like the Middle East and North America continue to influence oil prices and carbon reduction efforts, highlighting the complexities and challenges facing the energy industry today.
