(MENAFN- Khaleej Times) Russia had up to 79 million barrels of crude either travelling on tankers or held in floating storage over the past week, Kpler's estimates have shown The Ekofisk oil field off the North Sea. Europe's frantic search for alternatives to Russian natural gas has dramatically increased the demand — and price — for Norway's oil and gas. As the money pours in, Europe's second-biggest natural gas supplier is fending off accusations that it's profiting from the war in Ukraine. — AP file photo by Issac John
Published: Sun 29 May 2022, 3:58 PM
As the European Union countries wrangle to reach a consensus on a total ban on imports of Russia's crude, India and China have stepped up purchases and are importing record volumes of Russian crude, according to data from energy analytics company Kpler.
Russia had up to 79 million barrels of crude either travelling on tankers or held in floating storage over the past week, Kpler's estimates have shown. That's more than double the 27 million barrels of crude Russia had seaborne in February, just before Putin's invasion of Ukraine.
In April, Asia overtook Europe as the largest buyer for the first time, and that gap is set to widen in May, according to the data and analytics company.
Oil market analysts said the sharp jump in Russian oil in transit by sea underscores how the global energy trade has been thrown into turmoil by the invasion, with the US, the UK and many EU companies turning their backs on its cargoes and forcing Moscow to look for buyers in Asia. China and India have snapped up millions of barrels from the country to take advantage of hefty discounts on the flows.
In India, cheap Russian crude oil is attracting India's price-sensitive buyers to the point that Russia became the fourth largest oil supplier to India in April, moving up from the 10th place in March, according to shipment-tracking data compiled by Reuters.
China registered in April its first annual increase in crude oil imports since January as shipments rebounded on the back of higher arrival from Russia, analysts said.
“Some of the interested buyers in Asia are more motivated by economics rather than taking a political stand,” Jane Xie, a senior oil analyst at Kpler in Singapore, told Bloomberg.
The volume of crude at sea will expand by 45 million to 60 million barrels because of the increased Russian seaborne trade with Asia if the European Union is able to agree on phasing out all imports from the nation by the end of this year, industry consultant FGE said in a note this week.
Before the war, Russia was primarily selling its crude to Europe, but this is no longer the case after buyers, governments, international trading houses, and oil majors are all avoiding dealing with Russian oil, all the more so given the EU sanctions ban on bank transactions with the biggest Russian oil producers, including Rosneft. Trade majors have now wound down purchases of Russia's oil.
As of May 26, about 57 million barrels of Urals and 7.3 million barrels of Russian Far East ESPO crude were observed to be on the water, compared with 19 million of Urals and 5.7 million of ESPO in late February, according to Kpler data.
At present, the European Union is discussing the idea of temporarily exempting Russian oil supply via the Druzhba pipeline from a ban on imports of Russia's crude, as leaders are trying to persuade Hungary to drop its opposition to an embargo, according to sources with knowledge of the discussions.
Some EU leaders are inclined to accept an exemption of Russian oil deliveries via the pipeline that delivers oil to Germany and several central European countries, including Hungary—if indeed this is the price for getting Hungary on board with an oil embargo on seaborne imports of Russian oil, the sources say.
The temporary exemption could give Hungary more time to draft a plan on how to phase out Russian oil imports, according to Bloomberg's sources.
In early May, the European Commission proposed a ban on Russian crude and oil product imports, to come into effect by the end of the year. But the EU is still scrambling to find a common position, trying to persuade Hungary to drop its opposition to an embargo.
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