IMG.gif

Traders See Only Supply Risk From Price Cap

Copyright © 2022 Energy Intelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited.
Barrels,Stacked,Oil,Gas,Storage,Reserve,Yellow,Supply,Demand,Imports,Exports

EU embargoes could choke off Russian crude and refined product exports to such a degree that traders think the policy architects must alter their plans to avoid an oil market disaster in the coming months. The first EU ban says bloc members, with some exceptions, can no longer import Russian oil. The second bans use of EU insurance or finance for tankers transporting Russian oil anywhere. The import ban impacts the remaining 2.2 million barrels per day of Russian crude and products that are still flowing to the EU. Some critics are skeptical the EU can achieve this without serious rationing, particularly as it reels from soaring natural gas prices. But the shipping ban could be even more problematic for oil markets, since it impacts all of Russia’s 5.7 million b/d of global seaborne exports. The EU bans the import of Russian crude from Dec. 5 and refined products from Feb. 5, 2023. In August, EU countries were still importing 755,000 b/d of crude oil via the Druzhba pipeline and loading 1.08 million b/d of seaborne crude at ports. In addition, they loaded 900,000 b/d of refined products. Three countries on the Druzhba will be exempt from the ban: Hungary, Slovakia and the Czech Republic. They took a combined 240,000 b/d of crude in 2021 via the pipeline. Also exempt are Bulgaria and Croatia, which combined can buy about 160,000 b/d, mostly via the Black Sea. That leaves the EU seeking alternatives for 1.29 million b/d of Russian crude over the next three months and 900,000 b/d of products over the next five months.

Topics:
Oil Supply, Oil Tankers, Sanctions, Crude Oil, Oil Products, Oil Prices, Opec-Plus Supply
Wanda Ad #2 (article footer)
#
The biggest direct action against Russian oil supplies ever taken by the West is just days away, but many questions remain about the price cap.
Thu, Dec 1, 2022
Opec-plus on Sunday kept its oil production policy unchanged, in line with market expectations.
Sun, Dec 4, 2022
Shipping and insurance firms will have to cooperate with G7 authorities for the price cap on Russian oil to work, but sources are skeptical about the rules.
Fri, Dec 2, 2022