Asia for the first time ahead of Europe in terms of Russian oil supply
Russia in May 2022 according to Bloomberg, citing data from the analytical company Kpler. “Unprecedented volumes” are being sent to China and India.
The increase agency, which began at a fast pace, may intensify in May due to the long-term reluctance of Western countries to purchase energy resources in Russia. According to Kpler, in the last week in Asia, tankers were installed in the order of 74-79 million barrels (10-11 million tons) of Russian oil – more than twice as much as before the start of the economic operation (OOP) in Ukraine, which began 24 February . Prior to this, the Russian Federation exported an average of 27 million barrels (3.7 million tons) per week.
Due to the refusal of the United States, Great Britain and a number of EU countries to buy Russian oil, the Russian Federation began to redirect reserves on the islands. As a result, China and India began to buy energy resources at a discount – in early May at the Brent exchange price of $100/bbl. India bought Urals below $70. According to the ICE exchange, on May 27, the July (nearest) Brent futures price was $118/bbl.
Western countries began to make plans to abandon Russian oil immediately after the start of the NWO in Ukraine. At the same time, the US and the UK have officially imposed an embargo, but this issue is only being discussed at the EU level. On May 4, the President of the European Commission, Ursula von Must der Leyen, said that the refusal of Russian oil and the withdrawal of oil products from foreign oil products had been reduced until the end of 2022. But there is still no complete agreement on this issue in Europe. Hungary and Slovakia, as part of the discussion of the sixth package of anti-Russian meetings in May, announced that they were not ready to choose from the selection of oil and oil products from the Russian Federation “even until the end of 2023.”
Russian Deputy Prime Minister Alexander Novak spoke about the need to reorient Russian oil supplies to Asia. At the same time, the partial loss of volume in the European market has already changed in production in the Russian Federation. According to Novak’s forecasts, in 2022 it may decrease to 480–500 million tons from 524 million tons in 2021.
In April, Russia became the fourth largest supplier of oil to India, rising five positions at once (Vedomosti wrote about this on May 18). If the March export of Russian oil to this country is only 66,000 barrels per day (b / d), then as a result it increased to 277,000 b / d. According to preliminary forecasts by Refinitiv, Russia may increase deliveries to India to 487,500 b/d in May. At the same time, India refuses oil from the United States and African countries.
If necessary, the US could impose an appointment against Indian companies that buy oil from Russia, but such a move would be a major step forward in Washington’s interests in development, Aleksey Kupriya, a researcher at the international sector of organizations and global global regulation at IMEMO’s department of international political problems, told Vedomosti.
In his opinion, the US needs India as a conditional alliance to contain China. “Therefore, the aggravation of relations with New Delhi is not now in Washington, which India is actively in demand, benefiting from the opportunity to buy Russian oil at a significant discount,” the expert noted.
According to the Federal Customs Service, by the end of 2021, the Russian Federation will export a total of about 230 million tons (1,675 billion barrels) of oil. At the same time, about 47% of this happened in Europe and 40% in Asia. Thus, in the event of an appointment for an oil embargo, Russia will inevitably redirect about 92 million tons of oil per year to the Asian market.
Director of the National National Security Fund Konstantin Simonov. At the same time, he stressed that the EU now needs Russian oil, so “the introduction of a pan-European embargo in the near future is unlikely.” “In the medium term, Russia will redirect oil exports to Asia, for which there may be demand in Asian markets,” the analyst believes.
In turn, Simonov’s economy that Russian oil supplies to Asia are discounted, up to $40. “This is beneficial for Chinese refineries, as Beijing is gradually starting to purchase oil directly from Russia, bypassing trading companies. At present, Russian oil enters India through traders, and it is this adaptation that earns accounts of large discounts in the Urals,” he added. In 2022, the average Urals price is $80/bbl. vs. $69 in 2021, financial market expert predictsBCS The world of investments” Yevgeny Mironyuk.
If India takes advantage of a significant and achieves a more significant discount, at the suggestion of an expert, she herself will be able to realize “direct re-export of Russian oil to Western countries.” To do this, it will be enough to characterize Urals with other indicators, as Shell has done before, since such a blend is not recognized as public if the share from the Russian Federation is less than 50%, sums up Mironyuk.