India increases its purchases by 14, and China by 2
Western embargo on seaborne Russian crude oil
Due to the Russia-Ukraine war that started on February 24, the United States and Great Britain have committed to stop importing crude oil from Russia. The European Union (EU) agreed to impose an embargo on sea imports of Russian crude oil from December 5, the same day the EU and the G7 agreed to cap the price of Russian crude oil at $60 per barrel.
The terms are important: it’s crude and unrefined oil… and it’s transported by sea, not by pipeline.
The ban on oil products will take effect on February 5 next year, which is equivalent to 90% of Russia’s current oil imports. However, Bulgaria is exempt from sanctions until the end of 2024. We have already talked to you on leblogauto.com.
India is becoming a super customer of Russia
With the EU’s decision to cut Russian oil exports, Russia has sought customers elsewhere, offering lower prices to sell its crude.
India thus became one of the beneficiaries of cheap crude oil from the Kremlin. India’s crude oil imports from Russia reached a record high in 2021 at an average of 35,000 barrels per day. In January and February 2022, Russian crude oil imports from India averaged 68,000 bpd in March 2022, despite close to zero imports from Russia.
Since Russia’s aggression against Ukraine, India’s seaborne crude oil exports from Russia have grown steadily, rising 14-fold to 959,000 bpd in November 2022.” Even without joining the G7 price cap, India’s refining sector benefits greatly from deeply discounted Russian Urals crude oil, because now there are fewer buyers left,” TankerTrackers.com wrote on Twitter. Urals was trading almost a third below benchmark Brent after the price cap expired.
China, Turkey, the United Arab Emirates and Cuba are increasing their imports of Russian crude oil
Meanwhile, the importance of maritime crude oil trade has increased in energy relations between the Kremlin and Beijing.
China’s offshore crude oil imports from Russia nearly doubled to around 1.1 million barrels in November 2022 from 670,000 barrels per day in February 2022.
Turkey’s crude oil import from Russia also tripled in the same period, increasing from 110 thousand barrels to 327 thousand barrels per day on average.
Before the war, Cuba, one of the countries with very limited imports of Russian crude oil, imported 48,000 barrels and 23,000 barrels of oil per day in October and November. After nearly two years without importing Russian crude, the UAE joined the club of discount Russian crude buyers by importing around 35,000 barrels per day in May 2022. In November, the country’s import of marine raw materials from Russia amounted to about 28 thousand barrels per day.
Italy doubles Russian crude imports as Netherlands drops
Even before the EU sanctions package came into force, a number of European countries had almost zeroed out imports of Russian crude oil.
The exception was Italy, which increased crude oil imports from Russia from 163,000 barrels per day in February 2022 to 322,000 barrels in November 2022. Russia’s Lukoil ISAB refinery in Syracuse, Italy.
The Netherlands, which was one of the largest buyers of Russian crude oil in the EU before the war, has also distanced itself from its European neighbors by continuing its trade, albeit in a smaller volume.
Russian crude oil exports to the Netherlands fell from 595,000 barrels per day in February 2022 to 152,000 barrels in November 2022.
Imports from Germany and Poland through the Druzhba pipeline
According to the information of “Vortexa” undertaken by “Anadolu” agency, about 500,000 barrels of Russian oil are currently being exported to Germany and Poland from the northern branch of the “Drujba” pipeline. The two countries initially committed to halting these imports, as well as seaborne imports, although Poland has recently expressed skepticism.
“If the export of these pipelines is indeed stopped, it means that Russia will have to export this crude oil through sea ports, which will increase its need to find new buyers,” Vortexa adds.
The Drujba Pipeline, also known as the Friendship Pipeline, is the main line that transports oil from Eastern European Russia to Ukraine, Belarus, Poland, Hungary, Slovakia, the Czech Republic, Austria and Germany. In October, a total of 2.5 million barrels of crude oil and 700 thousand barrels of oil products were transported to EU countries through the pipeline.
Sanctions against some landlocked countries, including Hungary, Slovakia and the Czech Republic, will be temporarily suspended. These countries will be allowed to import Russian crude oil through the Drujba pipeline, although they cannot sell their oil to other member countries or third parties.
Our opinion, by leblogauto.com
“The European embargo on Russian oil, which was agreed on May 30, got off to a promising start,” as “The Economist” very serious media noted in June of last year. Later, his arguments were substantiated: after Russia invaded Ukraine in February 2022, the amount of its oil pumped into the European bloc increased. According to Argus Media, between January and April 2022, there was a 14% increase from 750,000 barrels to 857,000 barrels per day.
The embargo applies only to crude oil and oil products transported by sea and covers only 75% of imports from Russia. Pipeline oil to a handful of central and eastern European countries is temporarily exempt — a concession to Hungary, which blocked the deal. Refineries in these countries buy cheap Russian crude, which many Western buyers shun.
Will they take us as smart? So oil can travel the world – physically or even virtually through financial transactions – ultimately hiding a source we can’t see – Russia?
Finally, a big turkey: the European consumer?
Source: Turkish press (Anadolu Agency)
