Abu Dhabi crude is preparing to make its way to Europe for the first time in two years as the European Union seeks replacements for Russian oil, Reuters reports.
In May 2020, a shipment of Abu Dhabi crude was loaded for Italy, and there have been so shipments since, according to Arab News, citing Refinitiv Eikon data.
According to Reuters, citing shipping reports, France Total Energies has "provisionally chartered a tanker" to load Abu Dhabi crude in early May, bound for Europe. A total of 1 million barrels of Murban crude-one of three Abu Dhabi grades-will be loaded provisionally, bound for Britain in the first week of May.
Arab News reports that three Abu Dhabi grades-Murban, Das and Upper Zakum-will be increasingly replacing Russian oil for Europe in the coming months.
This will divert some Abu Dhabi crude from Asia, but India has already been refraining from higher-priced Saudi and UAE crude and taking advantage of highly discounted Russian crude.
The European Union has been grappling with a decision to ban Russian oil, and Ukrainian President Volodymyr Zelensky has demanded that the bloc cease importing oil and gas from the Kremlin.
Supplies have become even more risky with the outbreak of a fire Monday at oil storage facilities in Bryansk, near Russia's border with Ukraine, with Moscow claiming that the fire was the result of a Ukrainian missile strike.
The oil depot in question is dangerously close to the Druzhba pipeline, which feeds Russian crude into Europe. It remains unclear whether the pipeline, operated by Transneft, has been affected.
The Druzhba pipeline is responsible for transporting some one-fifth of Europe's imports of Russian oil.
By Charles Kennedy for Oilprice.com
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Comments
However, the bulk of UAE’s production like most of the Gulf producers continues to head to the Asia-Pacific region where oil demand is much bigger than Europe and prices are higher. So the odd tanker here and there won’t make much difference.
In fact, OPEC+ warned the EU against imposing an oil embargo against Russian oil since it can neither replace Russian oil exports nor could it be able to export much to it because of commitments in the Asia-Pacific region.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London