How EU ban on Russian oil works
2022.12.14 08:21
How EU ban on Russian oil works
Budrigannews.com – The International Energy Agency (IEA) reports that Russian oil exports to the European Union decreased by 430,000 barrels per day to 1.4 million bpd in November from the previous month.
According to a monthly oil market report, Russian seaborne crude volumes decreased by 330,000 bpd to 500,000 bpd, falling below Druzhba pipeline deliveries of 590,000 bpd for the first time.
Consequently, the EU’s share of Russian exports decreased from 50% prior to Moscow’s invasion of Ukraine on February 24 to 28% in November from 31% in October.
In the meantime, Russian crude exports to India reached a record level of 1.3 million barrels per day in November, while exports to China, both via pipeline and sea, remained roughly the same at 1.9 million barrels per day.
Russia’s output is expected to decrease as a result of the G7 price cap on Russian seaborne exports at $60 per barrel and the EU ban on Russian crude imports on December 5.
The IEA anticipates that Russia will be forced to shut down additional production as a result of falling supplies, despite the fact that the Druzhba pipeline’s exports of Russian crude to eastern Europe are exempt from the ban.
The IEA claims that the EU ban excludes Russian seaborne crude exports of approximately 100,000 bpd.
According to the IEA, the EU wants to increase supplies from the Middle East, West Africa, Norway, Brazil, and Guyana to make up for the drop in Russian crude imports.
The International Energy Agency (IEA) estimated in its November report that the United States and Kazakhstan could assist in replacing the approximately 1.1 million barrels per day of Russian oil that will be lost after December 5.
In December, Norway also intends to increase production from Johan Sverdrup, the largest oilfield in Western Europe. Equinor, the field’s operator, has stated that the Phase 2 development could add 200,000 bpd when it reaches its peak next year.
Since some landlocked refineries in eastern Europe are not included in the ban, some Russian oil will continue to flow through pipelines into the EU.
Last year, Germany, the Netherlands, and Poland imported the most Russian oil into Europe. However, all of these countries can also import other countries’ seaborne crude.
Companies like Rosneft and Lukoil, which control some of the largest refineries in the EU, have also contributed to the EU’s dependence on Russia. Germany, notwithstanding, has assumed command over the Rosneft-claimed Schwedt processing plant, which supplies around 90% of Berlin’s fuel needs, while the Lukoil-possessed ISAB treatment facility in Sicily could be sold before the year’s over.
Products derived from this feedstock are not permitted to be exported by EU nations that received temporary import exemptions for Russian crude oil.
The IEA stated that Bulgaria, Slovakia, and Hungary have all considered the restriction’s potential impact on run rates and are seeking exemptions for trading any excess products.
