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Russian Oil Exports: from Covid-induced Demand Collapse to Sanctions War

Russian Oil Exports: from Covid-induced Demand Collapse to Sanctions War

The events in Ukraine have radically altered the situation in the hydrocarbons market. The pandemic-induced demand collapse no longer seems that great a tragedy. Now we are facing a much more serious challenge.

The political West has dramatically increased sanctions pressure on Russia. The ousting of Russia from oil and gas markets has begun. A serious blow has been dealt to Russian oil supplies. The US, Canada, and the United Kingdom have imposed a ban on buying Russian oil. The EU, however, is the main battlefield.

Brussels has announced a policy of dramatic reduction of the presence of Russian oil and petroleum products. It has not yet gone as far as an embargo, but the matter has already been raised several times by individual states.

Active pressure on majors and traders has begun. One by one they have started announcing reduction or even discontinuation of trade in Russian oil. Difficulties arise with payment for supplies and with freight. The differential between Urals and Dated Brent has reached serious values. The IEA happily predicts decline in Russian production by 3 million barrels a day as soon as April. Active manipulation of figures is under way: Western experts speak about exports falling now by 30%, now by 50%.

The key question arises: how credible are these estimates and how realistic are the EU plans to completely give up Russian oil? Are there opportunities to redirect export flows to other countries, primarily China and India? Without exaggeration, this is now the most acute point in the development of the Russian oil industry. Indeed, a real fight for its future is under way.

The new report elaborates on the following subjects:

Dynamics of Russian oil exports

Current structure of Russian oil exports:

  • The pipeline/seaborne ratio
  • The breakdown of key crude grades and recipient countries
  • Destinations of shipments from key ports

Current situation with the main Russian crude grade, Urals

  • Key Urals buyers
  • Effect of sanctions on sales of the flagship grade
  • Traders’ short-term reaction to calls for dropping Russian oil
  • Opportunities for redirecting supplies

Competition to Russian oil on the European market

  • Comparison of the yield of petroleum products from Urals and alternative grades

Prospects of oil flowing away to China and India

  • Specifics of China’s oil imports

Contents of the report:

Date of release: May 10, 2022


If you are interested to obtain please contact » Elena Kim

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Analytical series “The Fuel and Energy Complex of Russia”:

Outlook for Russian LNG Industry
Russian Energy and West One Year after Ukraine Conflict Began: Are There Connections Still?
Green Agenda in Russia during Bitter Conflict with West
After February 2022 the agenda was radically rewritten. Western companies began leaving Russia en masse, economic relations with the West were drastically reduced, and the Russian economy began to be pushed violently from the global economic space, hemmed in by sweeping sanctions. All that was, to put it mildly, not the best background for talking about ESG. Especially because tasks of survival and stability under unprecedented pressure became the priority in the economy. In late 2022, however, attempts to reanimate the ESG agenda already became obvious. The message is put across insistently that it is important to Russia regardless of the foreign policy situation. While earlier the “green pivot” was seen as an opportunity to attract Western investors and their technological solutions to Russia, now Keynesian reliance on domestic manufacture is discussed.
Oil and Gas Sector Regulation in 2022 and Prospects for 2023
Gazprom at the Forefront of Economic and Political Battles with Europe
Gazprom is being actively thrown out of the market. Its annual supplies to Europe have shrunk from the previous 150 billion to 65 billion cubic metres of gas. European officials assure that they have already learnt how to live without Russian gas, so they will bring its purchases down to but nominal values in 2023. Their main hope is liquefied natural gas. Today the EU must make a crucial decision: whether it has passed the point of no return in gas business with Russia and whether it is certain that its economy will endure without supplies of Russian pipeline gas. Or, on the contrary, Europe will realise after all that the gas balance will not be achieved and the payment for so headlong a rush for LNG will be disproportionate. Assessment of the potential volume of LNG that will appear on the market before the end of the current decade will be the most important factor for making the decision.

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

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