International oil prices fluctuate widely, and the energy security guarantee mechanism needs to be improved urgently

Affected by geopolitical factors, the supply risk of the international crude oil market has erupted in a concentrated manner, and international oil prices have entered a period of
high and wide shocks.
In the short term, it is difficult to change the pattern of tight supply and demand, and how to prevent and resolve the risks caused by large fluctuations in oil prices has become a consensus in the industry, and it is urgent to improve the safety guarantee mechanism
.

International oil prices fluctuated widely at high levels

"In the recent period, the international energy market has been greatly affected and impacted by geopolitical events, causing the market to worry and panic
about the reduction or even interruption of oil supply.
International oil prices continue to rise and fluctuate
widely as geopolitical events change.
This oil price level and volatility have been separated from the supply and demand side of the international market, and this wide and frequent fluctuation is itself the biggest market risk
.
Lu Jianzhong, full-time deputy director of the China Petroleum National High-end Think Tank Research Center, suggested in an interview with the China Economic Times reporter that all parties should work together to create a "two-way security system for supply and demand", alleviate the "pressure on energy security", and build a global energy security cooperation mechanism
.

Entering 2022, the international crude oil futures price accelerated its rise, and on March 7, the international oil price approached $140 per barrel, a new high
since 2008.
But from March 9 to March 16, international oil prices fell sharply, falling below $
100 a barrel at one point.
The next two days have returned to more than
$100 a barrel.
It is widely believed that the international crude oil market has rapidly shifted from the earlier concern that weak demand will trigger a downturn in oil prices, to a supply tightening
that may be triggered by supply risks.

Liao Na, vice president of Shanghai Steel Union Energy Information Technology Co.
, Ltd.
, pointed out in an interview with reporters that the current fluctuations in international oil prices are mainly challenges brought by geopolitical factors to short-term supply, but demand has been significantly affected by high oil prices and the growth rate has slowed down, coupled with the second quarter is the oil demand off-season and refinery maintenance season, therefore, international oil prices will oscillate around $100 per barrel for a period of time, but the trend of geopolitical factors will affect the change
of oil prices.
At the same time, we need to pay attention to the consumption of OPEC's remaining capacity in the second half of the year, if the international oil price in the second quarter did not fall, the second half of the year may be further higher
.

Wang Yanting, a senior analyst at Jinlianchuang refined products, holds a similar view on
this.
She analyzed to this reporter that the recent changes in international oil prices are mainly affected by geopolitical factors, which have impacted the international crude oil supply market, and there have been some deviations compared with the actual demand of the current international market, and the probability of short-term international oil prices fluctuating sharply is larger
.

"Since the second half of last year, there are tight expectations in the international crude oil market, and it is generally predicted that international oil prices will oscillate higher in 2022, but it is not predicted that international crude oil prices will rise
sharply.
" Overall, the domestic refined oil consumption market is gradually digesting the current changes in
international crude oil prices.
Recently, several large domestic state-owned oil companies have vigorously guaranteed supply, the supply of refined oil products market is relatively abundant, coupled with the epidemic affecting the demand for refined oil, the domestic supply and demand situation is relatively moderate, and the impact of international oil price fluctuations on the domestic refined oil market is relatively limited
.
In the wholesale link of refined oil, the increase in the wholesale price of domestic refined oil products is lower than the increase in
international crude oil prices.
Wang Yanting said
.

Domestic refined oil prices may face downward adjustments

Although international oil prices have rebounded for two consecutive days, due to the previous sharp decline in international oil prices, as of March 21, the rate of change of international crude oil is still fluctuating in a negative direction, which increases the probability of domestic refined oil prices falling on March 31
.

Lv Jianzhong said that in the case of greater uncertainties in the international market and large fluctuations in oil prices, the adjustment of domestic oil prices should not only adhere to the integration with the international market, but also take into account the changes in supply and demand in the
domestic market.

According to the refined oil price adjustment mechanism set by the National Development and Reform Commission, when the international oil price is lower than 40 US dollars / barrel, or higher than 130 US dollars / barrel, the domestic refined oil price will not be adjusted
.
In Wang Yanting's view, international oil prices are difficult to touch the high level of $130 / barrel in the short term, the current crude oil change rate is in a negative fluctuation, and the domestic refined oil prices will most likely be lowered
on March 31.

Liao Na believes that the current domestic refined oil pricing mechanism mainly considers the cost of crude oil, and does not consider the supply and demand factors
of the domestic market.
However, in the case of excess overall refined oil resources, supply and demand have been basically digested
through market transactions and price adjustments at the level of enterprise operations.
In the past few years, on the basis of government pricing, the domestic refined oil prices have been based on the government's pricing, and the market entities in the wholesale link have different preferential discount activities, and the gas station operating enterprises have also developed into multi-format integrated service providers
.

Lu Jianzhong stressed that the vast majority of countries in the world cannot completely rely on their own strength to obtain energy security
.
Any turbulence on both sides of supply and demand could upset the balance, triggering a panic amplification effect that could cause oil prices to rise or fall
sharply.
China should pay attention to alleviating the transmission pressure and superimposed risks of the industrial chain and supply chain, establish a multi-energy complementary and coordinated development mechanism, strengthen the energy financial risk early warning and prevention mechanism, and improve the energy price formation and adjustment mechanism
.
In the face of supply uncertainty caused by the complex international situation, China should carefully study and judge the complex international situation, conscientiously make a response plan, and strive to enhance the resilience and safety
of the energy supply chain.

China's crude oil dependence on foreign countries has exceeded 70%, in the face of the recent ups and downs in international oil prices, Liao Na pointed out that China mainly relies on crude oil reserves and refined oil exports to hedge the pressure of high oil prices in the short term, as well as to make better use of long-term resources; In the long term, high oil prices will further encourage the development of alternative energy sources, including electricity and bioenergy
.