Russia has already lost more than 90% of its previous top European market, Northern Europe, as shipments have fallen to less than 100,000 barrels per day (bpd) in recent weeks from more than 1.2 million. of bpd before the Russian invasion of Ukraine, according to Bloomberg’s estimates.
The EU embargo on maritime imports of Russian crude oil and the price cap mechanism attached to it on Russian crude is expected to come into effect on December 5.
Russia has already lost more than 90% of its main market heading into February – buyers from Rotterdam, with shipments to the Dutch hub in the four weeks to November 18, down to just 95,000 bpd, according to Bloomberg estimates.
Around 75% of Russian crude oil currently loaded at Russia’s Baltic ports is heading to Asia, where Indian and Chinese buyers have been quick to buy Russian cargoes, especially earlier this year, at very favorable prices.
Now that the EU embargo and EU-UK-G7 price cap are only two weeks away, signs have started to appear that buyers in India, for example, are rushing to secure the shipment of supply before December 5 and unloading at the port of destination before January 19, which will not be subject to the embargo and the price cap.
But buyers in India and China would be beware of buying Loading Russian oil after Dec. 5, pending clarification on how the price cap would apply and whether there would be any fallout for buyers of Russian crude after the sanctions take effect.
The EU embargo on Russian oil will create huge uncertainties in global oil and commodity markets in just a few weeks, the International Energy Agency (IEA) said in its monthly oil market report last week.
Amid signs of weakening oil demand growth, ‘approaching EU embargoes on Russian imports of crude oil and petroleum products and the ban on maritime services will add further pressure on balances global tankers, and, in particular, in the already exceptionally tight diesel markets,” the IEA said. said.
“An oil price cap proposal may help ease tensions, but a myriad of uncertainties and logistical challenges remain,” the agency said.
By Josh Owens for Oilprice.com
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