Europe was Russia’s biggest energy customer!

Subscribe here: https://bit.ly/eudebates
In 2021, more than half of Russia’s oil exports went to Europe, which received about one- third of its oil imports from Russia. Germany was the largest European buyer of Russian oil, followed by the Netherlands and Poland.

Stay connected with us!
Facebook: https://www.facebook.com/eudebates.tv/
Twitter: https://twitter.com/eudebates
Instagram: https://www.instagram.com/eudebates.tv/

#eudebates the unique initiative aiming to promote debate, dialogue, knowledge, participation and communication among citizens. #Energy #Russianmissiles #PUTIN #NATO #war #EuropeanUnion #VonderLeyen #putinswar #Russia #sanctions #Energy #Oil #Embargo

China was the single largest buyer of Russian oil, taking 1.6 mb/d of crude on average in 2021, or about 20% of Russia’s exports, equally divided between pipeline and seaborne routes. Japan and Korea combined imported a total of 420 000 barrels a day (kb/d) from Russia last year, about 5% of their total imports, split between crude and products. The United States imported 710 kb/d, or 8% of its total imports, from Russia. But after the invasion, it banned imports of Russian oil, natural gas and coal. Russia was the third largest source of US oil imports prior to that. Canada, Australia and the United Kingdom also banned imports of Russian oil.

By October, a major reorientation of trade had taken place. Exports to the EU had been reduced by 1.5 mb/d to 3.95 mb/d. Total Russian oil exports to China had increased by 225 kb/d to 1.9 mb/d, to India by 965 kb/d to 1.1 mb/d, and to Turkey by 320 kb/d to 540 kb/d.

EU embargoes on Russian crude oil and refined petroleum products that come into effect on 5 December and 5 February 2023, respectively, will lead to a further reallocation of trade. An additional 1.1 mb/d of crude oil and 1 mb/d of oil products currently going to EU countries will have to find new homes. As this will be accompanied by a ban on EU/UK maritime services, export losses and production shut-ins are expected to increase. By early 2023, an additional 1.4 mb/d of Russian oil production is expected to be shut in, for a total of 1.9 mb/d compared with pre-war levels.

How dependent is Russia on oil and gas revenue?

Revenues from oil and gas-related taxes and export tariffs accounted for 45% of Russia’s federal budget in January 2022. Considering current market prices, the export value of Russian piped gas to the EU alone amounts to USD 400 million per day. Total export revenues for crude oil and refined products currently amount to around USD 560 million per day, down from about 690 million a day in the first two months of the year.

What alternative oil supplies are available to compensate for curtailed Russian exports?

Most of the world’s effective spare capacity is concentrated in Saudi Arabia and the United Arab Emirates. Together they hold roughly 2 mb/d of spare capacity, but that is not all immediately available.

Outside of OPEC+, the United States looks set to add 1 mb/d this year and a further 1.1 mb/d in 2023, with smaller increases from Canada, Norway, Guyana and Brazil. We were already expecting robust growth from the US shale sector, as operators have increased their rig count and drilling rates in response to rising prices. However, a sharp draw down in drilled but uncompleted wells (DUCs) during 2021, labour shortages, supply chain issues and cost escalation could limit growth in the near term.