How Russian Oil Is Making Its Way From Europe To Asia

Russia has ramped up oil exports to Asia since the invasion of Ukraine led to Western sanctions on Russian oil imports. Some of the crude oil and products going to Asia are transhipped from one ship to another in international waters around Europe, including outside UK territorial waters. Off the coast of Suffolk in the UK, outside UK territorial waters, at least two ship-to-ship transfers took place in May, and boats with British crews assisted in the transfer and delivered supplies to the tankers, according to a report. research by Global Witness and The independent.

Southwold’s Suffolk coast has been designated an Area of ​​Outstanding Natural Beauty, but it’s also one of the few areas in the UK where ship-to-ship transfers are allowed, notes The Independent’s Ben Chapman.

In the STS shipments of fuel oil from Suffolk, identified by Global Witness and The Independent, two tankers carrying 165,000 tons of Russian fuel oil worth more than $201 million (£165 million) went to the Middle East and Singapore.

These oil transfers are not illegal. Yet such ship-to-ship (STS) transfers are increasingly being used in Europe for reloading Russian oil onto ships that then travel to Asia via the Suez Canal, tanker-tracking publications show. There are other areas in Europe where STS transfers take place, and new STS transfer hubs have emerged in recent months.

According to vessel tracking and analysis by: Lloyd’s ListThe Chinese supertankers are at the center of a new STS transfer hub in the mid-North Atlantic, about 860 nautical miles west of Portugal. Operations like this in the area have never been seen before, Alex Glykas of maritime advisors Dynamarine told Lloyd’s List.

According to Roslan Khasawneh, senior fuel oil analyst at the energy analysis firm, Russia is also shifting its residual fuel oil (RFO) exports — the largest such export in the world — from the West to Asia, Africa and the Middle East. vortexa.

“Russia’s shifting flows are creating new transshipment hubs for Russian RFO, including offshore Kalamata, Greece, where there has been a spike in ship-to-ship transfers, as well as in Egypt, where Russian fuel oil imports have soared to a record 70 kbd in June. As a result, fuel oil exports from Egypt jumped to a 10-month high of 120 kbd in June, mainly to Saudi Arabia,” Khasawneh wrote in a July analysis.

Increased STS transfers are helping Russia move more and more of its oil volumes to Asia and its main buyers there, China and India. These measures largely offset Western sanctions against Russian oil and the effect of the upcoming EU embargo on imports of Russian oil and products by sea, which are expected to come into effect by the end of the year.

Western sanctions have so far failed to curb Russian oil exports as Moscow diverts crude oil and products to its more than willing Asian buyers, China and India.

Related: Oil Dips Amid Renewed Demand Problems

Russian oil exports fell by just 250,000 barrels per day to 7.4 million barrels per day in June, the International Energy Agency (IEA) said in its monthly report. report for July. Despite crude oil and product export volumes being the lowest since August 2021, Russian export revenues rose $700 million month-on-month due to higher oil prices, to $20.4 billion, or 40% above last year’s average. years, according to IEA estimates.

European ship owners, in particular Greek private operators, move a lot of Russian oil in the months before the EU ban on Russian oil imports by sea takes effect. Greek tanker owners have increased their exposure to Russian oil shipping in recent months as they race to take advantage of higher demand for heavily discounted Russian oil in China and India.

Russian exports of crude oil and products have yet to take a big dent. Despite slightly lower volumes, Putin is making more money from oil so far than before the invasion of Ukraine or last year, as oil prices remain high.

The West’s main goal of crippling Putin’s earnings, but still allowing the export of Russian oil anywhere in the world, has led to the idea of ​​limiting the price of Russian oil. The G7 group of leading industrialized countries, led by the United States, is considering waiving the ban on insurance and all services that allow the transportation of Russian oil if it is bought at or below a certain price.

By Tsvetana Paraskova for Oilprice.com

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