Ukraine: Ukraine has done little to realign oil and gas infrastructure to source supplies from other countries. Russia regards the Ukraine as its own, and it wants them back. Hence, this situation will continue to be difficult however it has little effect on world oil markets … so far.
Cuba: Putin Pledges to Help Cuba Explore Offshore (By MarEx 7/14/2014) Vladimir Putin pledged to help revive Cuba’s struggling offshore oil exploration on Friday at the start of a six-day tour of Latin America as Russia aims to reassert its influence on the communist-ruled island.
Putin was joined in Havana by close ally and so-called Russian oil czar Igor Sechin, the chairman of state oil company Rosneft, to finalize a deal to explore for oil off Cuba’s northern coast.
The Russian president also promised to reinvest $3.5 billion of Cuban debt with Russia into development projects on the island, part of a deal in which Russia forgave 90 percent of Cuba’s debt, or almost $32 billion, most of it originating from Soviet loans to a fellow communist state.
Both measures inject much-needed foreign investment into Cuba and demonstrate an act of defiance against the United States, which maintains a 52-year-old economic embargo that effectively shuts out many Western companies from doing business in Cuba.
“We will provide support to our Cuban friends to overcome the illegal blockade of Cuba,” Putin said.
Globally: crude oil markets are fairly well supplied according to traders and profit margins for refiners in several regions have fallen sharply, reducing demand for crude. This weakness has been reflected in the price structure of the Brent futures market, as contracts for prompt oil have fallen to significant discounts below later contracts. Crude is soft because demand is soft.