The partial embargo of the European Union on imports of Russian oil will force European countries to seek other sources of supplywhich could cause a price increase.
Russia produces some 11 million barrels a day of crude, of which it exports just over 5 million.
China is the main importer of Russian crude, according to the International Energy Agency (IEA), but Europe as a whole exceeds it, with 2.4 million barrels a day last year.
Russia also exports 1.5 million barrels a day of diesel, on which Europe depends heavily.
A Gazprom service station in Saint Petersburg. Photo EFE
Gas, more complicated
However, Europe depends much less on oil than on Russian gas and it’s much easier find alternative cargoes by ship.
The 27 member countries of the EU agreed to phase out imports of Russian oil transported by ship, which it represents two thirds of European purchases.
A temporary exception is planned for oil that arrives through pipelines, in a concession to circumvent Hungary’s veto, but Germany and Poland had already given up importing through this route.
Total, 90% of Russian oil imports will be stopped by the end of the year, according to EU leaders.
“We will have to find new suppliers for about 3 million barrels per day in the coming months,” said Carsten Fritsch, an analyst at Commerzbank.
“The EU seems to be more interested in West African supplier countries,” the expert noted, citing Nigeria, Angola and Cameroon.
“There are already alternatives, which are essentially the Middle East and North America for crude,” Olivier Gantois, president of the business association Ufip Energies et Mobilités, told AFP.
Commerzbank also cites contracts to import large amounts of oil from the United Arab Emirates in July.
Gazprom headquarters in Saint Petersburg. Photo EFE
In addition to crude, Europe will have to find alternative fuel sources, not produced in sufficient quantities.
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The Ufip mentions in this respect “India, which is a great producer”.
The French group TotalEnergies also indicated that it would mobilize “petroleum products from other continents“.
In the medium term, the EU also wants to reduce its dependence on fossil fuels by accelerating the development of renewable energies.
Oil prices, already high in recent months, rose to their highest levels on Tuesday in two months after the EU decision, which however had been anticipated.
Experts believe that the Russian barrels simply will be redistributed at low prices to Asia in a game of “communicating vessels” to release other oil shipments to Europe.
Helima Croft, an analyst at RBC Capital Markets, believes that Western officials are making room for this Asian “valve” to prevent a price hike.
“This strategy appears to be based on the assumption that Asian importers, especially India, will continue to demand even higher discounts to accept Russian products,” he says.
To avoid a politically sensitive price hike, Western powers can still release some of their strategic oil reserves.
Above all, they expect OPEC agree to pump more crude in the coming months to supply the market.
However, this is unlikely to happen as the cartel, allied with Russia, is benefiting from the high prices.