EU faces diesel crisis with impending Russian ban – Bloomberg – RT Business News


According to ship tracking data, the bloc still depends on Moscow for 40% of its imports

The EU will struggle to replace Russian diesel when a ban on oil products transported by the country and a corresponding price cap go into effect on February 5, Bloomberg reported on Friday.

The EU imported about 220 million barrels of diesel-like products from Russia in 2022, the agency reported, citing ship tracking data from Vortexa. By December, about 40 percent of the fuel for the unit came from the country. sanctioned.

While the region’s dependence on Russian oil products fell last year, more than half of all sea shipments to the European Union and Britain in 2021 were Russian, underscoring the difficulty of replacing the banned barrels in less than three weeks.

From the beginning of February, there is a complete shift in the trade flow of diesel fuel“, the representative of Wood Mackenzie consulting firm Mark Williams told the media.

The data showed that the EU has started to increase shipments of diesel fuel from Saudi Arabia and India. Analysts say these shipments are likely to increase this year due to new refineries coming on stream soon. Experts also point out that the US has the opportunity to supply more diesel to the Union.

Moreover, China can indirectly help supply diesel fuel to the region. The country’s diesel exports are expected to be similar in volume to what the EU and UK received from Russia before sanctions. Although these shipments typically do not end up in Europe, they can replace volumes from other producers, which can then fuel the region.

Chinese politics is a game changer“Williams told Bloomberg in this country”holds the key to all the excess processing power in the world.»

The EU can also use intermediary countries to obtain fuel. Since Turkey is not a member state and not party to the sanctions against Moscow, it can increase imports of Russian diesel and sell it to the bloc after refining, which is allowed under the ban and price cap agreement. . However, the final fuel cost can be much higher in this case.

Experts warn that if the country fails to find new non-European buyers, the sanctions could lead to the complete disappearance of Russian barrels from the world market. This forces Moscow to cut production, thereby reducing overall supply and raising prices. Combined with strong demand, this could lead to a deepening of the bloc’s energy crisis.

The higher the demand and the steeper the decline in Russian diesel production, the more complex and likely the disruption.This was reported by S&P Global representative Hedy Grati.

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