Russian federation is looking for new importers of its oil by sea

Russia will try to find new markets for the export of oil, which will be banned by the European Union.

As a reminder, the EU embargo on the import of russian oil will enter into force on December 5, 2022, and oil products on February 5, 2023. Currently, the EU covers up to half of seaborne oil exports from russian federation. However, as Bloomberg writes with reference to the analytical company Kpler, some countries are able to take this cargo turnover on themselves.

In particular, Indonesia, Pakistan, Brazil, South Africa, Sri Lanka and some countries of the Middle East can together buy up to 1 million barrels of raw russian oil already this winter, according to Kpler.

“Russian companies are already diverting their cargoes to Asia, mainly to India and China, as some European buyers voluntarily avoid their oil. This came at a high price, as Urals trades at a large discount to global benchmarks,” the agency reminds.

The redistribution of global oil flows may partially displace exports from other OPEC+ members. In Indonesia, “one of the main replacement candidates is Nigeria,” while in Pakistan, “we wouldn’t be surprised to see smaller flows of Arab Light” from Saudi Arabia, Kpler points out.

According to the analytical company, the Middle East, which this winter can receive up to 500,000 barrels of russian raw oil per day, can redirect its own oil, which was previously used domestically, to export markets.

“It might be tempting to funnel Urals to refineries and let grades like Arab Light flow freely to Asia,” Kpler notes.