Russia increases oil exports to India and China as EU considers outright ban – Reuters

Russia had up to 79 million barrels of crude transported on tankers or stored in floating storage over the past week, according to Kpler estimates

The Ekofisk oil field off the North Sea. Europe’s frantic search for alternatives to Russian natural gas has dramatically increased demand – and price – for Norwegian oil and gas. As the money pours in, Europe’s second-largest natural gas supplier is pushing back against accusations that it is profiting from the war in Ukraine. — Photo of the AP file

Published: Sun 29 May 2022, 15:58

As European Union countries scramble to reach a consensus on a total ban on imports of Russian crude, India and China have stepped up their purchases and are importing record volumes of Russian crude, according to data from the energy analysis company Kpler.

Russia has had up to 79 million barrels of crude either transported by tankers or held in floating storage over the past week, according to Kpler estimates. This is more than double the 27 million barrels of crude oil transported by Russia in February, just before Putin’s invasion of Ukraine.

In April, Asia overtook Europe as the top first-time buyer, and that gap is expected to widen in May, according to the data and analytics firm.

Oil market analysts said the sharp increase in Russian oil transiting by sea highlights how the global energy trade has been disrupted by the invasion, the United States, the United Kingdom and many companies European Unions turning their backs on their cargoes and forcing Moscow to look for buyers in Asia. China and India have clawed back millions of barrels from the country to take advantage of steep flow discounts.

In India, cheap Russian crude oil is attracting price-sensitive Indian buyers to the point that Russia became India’s fourth-largest oil supplier in April, jumping from 10th place in March, shipment tracking data shows. compiled by Reuters.

China recorded its first annual increase in crude oil imports since January in April, as shipments rebounded on the back of an increase in arrivals from Russia, analysts said.

“Some of the interested buyers in Asia are driven more by the economy than by political stance,” Jane Xie, senior oil analyst at Kpler in Singapore, told Bloomberg.

The volume of offshore crude will increase by 45-60 million barrels due to increased Russian maritime trade with Asia if the European Union is able to agree on the phasing out of all imports in from the country by the end of this year, according to industrial consultant FGE. said in a note this week.

Before the war, Russia mainly sold its crude to Europe, but this is no longer the case since buyers, governments, international trading houses and oil majors all avoid dealing with Russian oil, d especially since the EU prohibits sanctions against banking transactions with the largest Russian oil producers, including Rosneft. The trading majors have now reduced their purchases of Russian oil.

As of May 26, around 57 million barrels of Urals and 7.3 million barrels of Russian Far East ESPO crude were seen on the water, compared to 19 million Urals and 5.7 million barrels of late ESPO. February, according to data from Kpler.

Currently, the European Union is discussing the idea of ​​temporarily exempting Russian oil supply via the Druzhba pipeline from the import ban on Russian crude, as leaders try to persuade Hungary to drop its opposition to an embargo, according to sources with knowledge of the discussions.

Some EU leaders are inclined to agree to an exemption for Russian oil deliveries via the pipeline that carries oil to Germany and several central European countries, including Hungary – if that is the price to be paid for embargo Hungary with an oil embargo on maritime imports of Russian oil. oil, the sources say.

The temporary exemption could give Hungary more time to develop a plan on how to phase out Russian oil imports, Bloomberg sources say.

In early May, the European Commission proposed a ban on imports of Russian crude oil and petroleum products, which was to come into effect by the end of the year. But the EU is still struggling to find a common position, trying to persuade Hungary to drop its opposition to an embargo.

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