Russia lost 90% of its key European oil market even before the embargo

Oil supplies from the Russian Federation to Northern Europe fell below 100,000 barrels per day.

Russia may reduce oil production / Photo REUTERS
Russia may reduce oil production / Photo REUTERS

Two weeks before the entry into force of EU sanctions, Russia has already lost more than 90% of its oil market  in the northern countries of the EU, which used to be the mainstay of supplies from the Baltic and Arctic terminals.

In the four weeks to November 18, Russia sent only 95,000 barrels of oil per day to Rotterdam – the only European destination remaining outside the Mediterranean/Black Sea basin, writes Bloomberg .

In February, the publication reminds, the daily volume of deliveries of Russian oil in this direction amounted to more than 1.2 million barrels. Countries such as Lithuania, France and Germany stopped importing oil by sea from the Russian Federation several months ago, and Poland followed suit in September.

It is noted that three quarters of the oil loaded in the Baltic ports of Russia is now sent to Asia. Indian refiners are buying oil to take advantage of the grace period offered by the US and Great Britain. This period exempts from sanctions oil that will be loaded before the ban takes effect on December 5, and if it is delivered by January 19.

It is expected that the G7 countries will name the maximum prices for Russian oil as early as this Wednesday. Cargoes bought at prices above this level will lose access to European and British ships, insurance and other services.

Total oil supplies from Russia fell to a nine-week low of 2.67 million barrels per day in the seven days to November 18. The Kremlin’s weekly income from oil trade fell to the lowest level since the beginning of January – $109 million. At the same time, the average income for the four weeks to November 18 decreased by $3 million, to $127 million, and became the lowest since February.

Seaborne exports of crude oil from Russia to European countries fell to their lowest level in a year, averaging 569,000 barrels per day in the 28 days to November 18. These figures do not include deliveries to Turkey, where more than 300,000 barrels of Russian oil per day have been going for the sixth week. This is more than triple the volume typically seen before Russian troops invaded Ukraine, and the country is expected to remain an important destination for Russian oil after EU sanctions come into effect on December 5.

Embargo on Russian oil

At the end of May of this year, through the leaders of the EU countries, they agreed on the introduction of a ban on the export of Russian oil . European Union sanctions, aimed at banning oil supplies from the Russian Federation by sea transport, should come into force on December 5. At the same time, the EU established a transition period for the import and transit of Russian oil products, which will end in February 2023.

The head of the European Commission, Ursula von der Leyen, predicts that the oil embargo will reduce about 90% of oil imports from the Russian Federation to EU countries by the end of this year.

According to the results of September 2022, Russia’s income from oil exports decreased to $15.3 billion, which is the lowest figure this year, against the background of falling oil exports and oil prices. And already on October 5, information appeared that Russia will reduce the volume of oil production .

Meanwhile, the US and its allies want to cap Russian oil prices at $40 to $60 per barrel. Thus, according to US Treasury Secretary Janet Yellen, Washington can cap the price of Russian oil at $60 per barrel. We will remind that the idea of ​​introducing maximum prices for Russian oil was proposed at the summit of G7 leaders at the end of June.

(C)UNIAN 2022

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