Breaking News:

JPMorgan Analyst Sees Energy Supercycle With Oil As High As $150

Putin Ally Threatens Strike On Europe’s Largest Oil Hub

A Russian politician and former regional military commander has suggested that Europe will "totally croak" if Russia militarily targets Europe's biggest oil hub in the Netherlands. Andrey Gurulyov, an MP at the state Duma, was speaking on state TV when he said that if Russia decided to target the Netherlands, where some 40 percent of Europe's oil is received and processed, Europe would "croak," according to a report by Yahoo News.

"No less than 40% of crude oil is imported and processed by the Netherlands in its coastal areas," Gurulyev said. "It's such a small spot that it would be hard to miss."

"The main supply chain is via oil tanker; we don't even need a missile. A torpedo will do it, especially if it's docked at port. It will burn along with all of the port's infrastructure. Europe will not only freeze but totally croak," Gurulyov also said.

As the Yahoo News report points out, the politician's stance does not reflect official state policy but is rather a form of muscle-flexing as the war in Ukraine drags on.

However, Europe is indeed vulnerable and not only to military attacks. It imports a quarter of its crude oil from Russia and has embargoed that, although the embargo will only come into effect after six months.

Yet, at the same time, some European Union members are discussing a cap on Russian oil prices as a means of both sanctioning Russia and ensuring sufficient oil supply globally. The G7 last weekend said it would try and get on its side all the big importers of Russian oil in order for the price cap to work.

Related: Canada May Expand Energy Infrastructure To Help Europe

While the G7 group discusses the price cap, which their leaders admit will not be easy to implement, Russian oil flows into Europe are once again on the rise after a dip following the six packages of sanctions the European Union slapped on Moscow.

Per data compiled by Bloomberg, European oil refineries were receiving Russian oil at the rate of 1.84 million barrels daily last week, which was the third week in a row that saw increases in Russian oil shipments.

In its report on the data, Bloomberg noted that part of this increase was Lukoil's Litasco shipping more to the refineries it operates across Europe, and part was higher shipments to Turkey. Yet the report also noted that the decline in shipments to Europe proper appeared to have slowed down.

Meanwhile, a lot more oil is headed to China and India, with the former importing an average of 1 million bpd of Russian crude in the past four weeks and India taking in some 600,000 bpd.

At the same time, shipments to northern Europe-where the Dutch oil hub Gurulyov referenced is located-have fallen by more than 60 percent since the Ukraine invasion. In the week to June 17, these averaged 450,000 bpd, down from 1.25 million bpd at the start of the year. At the same time, some 370,000 bpd of Russian oil are being shipped to the Netherlands for storage.

The embargo on seaborne Russian oil imports into Europe comes into effect at the end of the year and an embargo on oil product imports-of which the European Union is an even bigger consumer than of crude-will follow three months later.

This embargo may need to be revised if the leaders of the G7 strike an agreement on a price cap. The idea of the cap, after all, is to have more Russian oil come into international markets but at a lower price. The big unknown in this game is whether Russia will accept the embargo or decide to go all in and suspend crude exports.

By Charles Kennedy for 

More Top Reads From

Back to homepage

Loading ...

« Previous: The Biggest Threat To Brazil’s Oil Boom

Next: Delayed EIA Inventory Report Shows Crude Draw, Products Build »

Charles Kennedy

Charles is a writer for More