On the world oil market Redistribution: what awaits Russia
The world oil market is on the verge of a redistribution of research areas and foreign trade relations. Europe’s refusal of Russian energy resources is forcing domestic producers to look for new distribution channels, and importers to take care of the selection of alternative import supplies. In two or three years, the picture of the planet’s oil market will undergo drastic changes and change, shaping trading skills. Russia, which has already found itself at the very epicenter of events and intrigues around the future of the raw materials industry, has the most compressed prospects for choosing development priorities that will serve as a target for our mining sector for years to come.
At the beginning of the summer, European diplomats, albeit with difficulty, nevertheless agreed on the parameters of the Sixth Package of Anti-Russian Packages, the export of exports from our country. the adaptation includes a partial embargo on the supply of Russian “black gold”, declaring in particular “outlawed” the maritime transport mixture, but lifting the ban on hydrocarbons supplied through the Druzhba pipeline. The Europeans intend to refuse from the energy resources coming through the “served” routes within six to eight months.
Anti-sanctions cocktail
Russia, which, despite the fact that there have been cases of the emergence of “black gold” on the planet, extracts for itself an extremely accurate and verified tactic that allows it to maneuver between emissions and economic exclusions in the market. The bets made in the energy confrontation leave no room for error. Last year, importers seized more than 71 billion euros worth of oil and oil products in our country, which covered 28% of cases of seizure of external purchases of the continent. The price ratio, which allows exchange quotes to set one record after another, while compensating for the underdelivered volumes due to export barriers. Only in the first quarter of this year, when food products are consumed, the volume of purchases of oil and petroleum products in the EU amount to 27 billion euros.
It would be wise, under the current conditions, to try to maintain our part of the share in the world commodity market by adjusting exports in such a way that foreign sales of energy resources somehow get along with sanctions barriers. There are enough ways for convenient maneuvers. On the one hand, it is possible to characterize West Siberian grades with hydrocarbons from the Middle East fields, thereby supporting the “citizenship” of oil and freeing trade in such a cocktail from legal restrictions of prohibitions.
On the other hand, domestic exporters could become direct partners under an agreement with OPEC +, unclaimed barrels on the European market, which are very useful for Arab sheikhs. Through consumption in Russia, they increase their export supplies of “black gold” and thus recommend to Washington consumption for the production of energy resources to optimize fuel prices. Additional volumes from Middle East natural tycoons are also being driven by demand from Asian clients, who are not shy about gaining performance from European commodities, which translates into better pricing. By the way, Chinese buyers themselves are in full swing getting a scheme for reloading Russian “black gold” in an operation at sea, which ensures the legal connection of hydrocarbons with our country.
All schemes, within the framework of this, Moscow continues to skim the cream off France’s oil pie, and consumers receive a stable channel for the use of side energy carriers, making it difficult to interfere with Washington. In addition to the fight against American hydrocarbons, the Americans, the fuel market is not connected with the direction of rising price tags, they decided to take drastic measures and resume the purchase of raw materials in Venezuela, until recently also for the upcoming energy sanctions. Among the “rejected” supplies, Iran will also soon provide, promise to return to the pre-sanction loading level in a short time, increasing production volumes to 4 million barrels per day. Iranian raw materials are also likely to be sold at a discount, which will increase their nutritional value in general using natural resources. In general, the emergence of situations from countries to the previously widespread American embargo will serve as a reason for eliminating the general shortage of energy resources and a drop in interest in such politically “toxic” raw materials as Russian oil.
Focus on Asia
What to do in these conditions in Moscow? We, most likely, should not count on the exact support of the Arab community, which, against the backdrop of anti-Russian restrictions and a partial EU embargo, may prefer to distance itself from the geopolitical differences of the Old World. Although Saudi Energy Minister Prince Abdulaziz bin Salman has signaled that Riyadh will support Russia as an OPEC+ member even as Western sentiment tightens. Nevertheless, according to The Wall Street Journal, a number of alliance members are exploring the option of suspending our country’s participation in the oil production deal. According to Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation, the decision to “disqualify” our part of the majority of OPEC + members remains a danger that the violation of agreements with Russia will lead to the destruction of the territory itself, which successfully coordinates the pricing of the “black gold” market.
However, so far no complications in OPEC+ are expected to prevent our country from benefiting from the status of an energy supplier from the African continent. According to the Sergey Pikin Energy Development Fund, due to the fact that the Western embargo provoked an increase in energy prices, and our country is gradually bypassing foreign trade obstacles to developing new markets in Asia, Russia’s profit from oil and gas exports in 2022, reached a record high – about $ 350 billion. However, when the likelihood of a situation may change dramatically. According to Bloomberg analysts, in the future, due to the embargo, Russia will consume up to $12 billion from a ban on pipeline resources and another $10 billion from a moratorium on offshore oil exports.
To eliminate financial and production problems caused by natural expulsions from the European energy market, experts advise Russia to shift its attention to the countries of the Asian region, primarily to China and India, which enjoy protection in relation to our country. “In order to increase exports to Asia, Russian oil companies must resolve the issue of transport processing, because a significant part of the risk is now focused on deliveries to European countries, where about half of all exports go,” says Yulia Melnikova, an analyst at Alfa Capital. — Russia has already begun to reconfigure oil supplies to Asia to partially offset the effect of the European embargo. In recent months, deliveries to India have increased several times. China, which accounts for about 30% of Russian oil sales, is also leading the increase in purchases.”
While maintaining the outlined observable future, 80-90 million tons of oil, previously sold to Russia in the European market, will go to five Chinese or Indian buyers, and Middle Eastern raw materials of the same type, almost on the contrary, will go to the countries of the Old World. “It is no secret to anyone that by 2030-40 the areas are the main consumers of hydrocarbons, including those from Russia,” Alexey Fedorov, TeleTrade statistics analyst. “The oil embargo forces our country to be proactive and transitional in redirecting energy choices to Asia from 10-15 years to 6-9 months.”
In this regard, in the opinion of several months, during which producers and consumers of raw materials will adjust to analysts dealing with trade realities, the oil market risks experiencing both record risks and rapid falls. Maintaining demand even at a preferable level, against the background of diversification of commercial offers, implies a high probability of a shortage of oil supply in the near future. “The cost of a barrel is already rising, which can not only renew annual highs of $134, but also show higher levels in the region of $160-180,” forecasts Alexey Fedorov. “Unfortunately, such high prices cannot last long. By the end of 2022 – the beginning of 2023, barrel prices will drop to $50-60, after which the global economy will save its life, getting used to various differences in the structure of the international oil community.