Oil market restructuring

Russia’s military campaign in Ukraine has restructured the global oil market, in which African suppliers meet Europe’s oil needs, and Russia diverts crude oil tankers to Asia due to the influence of foreign countries. Western sanctions.

Russia’s turn to Asian buyers marks the biggest change in supply in the global oil market since the US shale revolution shaped the market a decade ago.

Russia’s oil exports in April 2022 have returned to pre-war levels in Ukraine, according to data from the International Energy Agency (IEA). Oil prices also stabilized around $110 a barrel after hitting a 14-year high of $139 a barrel in March.

Even if the European Union (EU) agrees on a Russian oil ban in the upcoming sanctions package, analysts say the impact on Russia could still be mitigated by demand from Asia, especially. is China.

According to oil tanker tracker Petro-Logistics and other data, oil supplies from Russia to Asia by sea have increased by at least 50% since the beginning of this year.

Petro-Logistics President, Mr. Mark Gerber, told Reuters that the amount of Russian crude oil and oil products shipped directly to Asia has reached 2.3 million barrels per day. This figure in January, before the military operation in Ukraine, was only about 1.5 million barrels per day.

A tugboat pushes an oil barge towards the Brooklyn Bridge in New York City – USA on May 24 Photo: REUTERS

According to Petro-Logistics, to make up for the shortfall in oil supplies from Russia, European refineries turned to West African crude imports, up 17% in April compared to the 2018-2021 average. About 660,000 bpd was shipped – mainly from Nigeria, Angola and Cameroon – to Northwestern Europe in May.

According to Gerber, West African crude exports to India have nearly halved, from 510,000 bpd in March to 280,000 bpd delivered in April, as New Delhi switched to buying Russian oil.

Supply from North Africa to Europe has also increased by 30% since March. In addition, according to market research firm Kpler (Belgium), Europe also increased oil imports from the US.

With the demand for gasoline, diesel and jet fuel growing ahead of the summer peak in the US and Europe, right before the EU meeting on the ban on oil imports from Russia on May 30, world oil prices has increased to the highest level in the past 2 months.

Follow Reuters, the price of Brent crude oil on May 30 sometimes increased by 0.4%, to 119.89 USD/barrel; and WTI oil price increased by 0.5%, to 115.67 USD/barrel.

Despite efforts since early May, EU member states have not been able to agree on a sixth package of sanctions against Moscow, partly because the Russian oil ban is not accepted by Hungary, which is also a problem. large for Slovakia and the Czech Republic.

The EU’s high representative for foreign affairs and security Josep Borrell said that EU leaders will attend a two-day summit on May 30 and 31 to discuss supporting Ukraine and how to deal with the effects of the war. Russia’s military crisis, including rising energy prices, the risk of food shortages and the EU’s defense needs.