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Refiners in Europe have significantly raised purchases of North Sea crude grades in recent weeks as they look to replace as much Russian crude as soon as possible, ship-tracking data compiled by Bloomberg showed on Wednesday.
European buyers, especially those in the Baltic region, began raising imports of crude pumped in the UK and Norwegian sectors of the North Sea last month as many refiners vowed to cut dependence on Russian crude immediately, or as soon as feasible.
All cargoes of the Forties blend and all but two cargoes from the giant Johan Sverdrup field offshore Norway that have loaded so far in April have been delivered in Europe, Bloomberg’s data showed. Europe was not the primary destination of Forties and Johan Sverdrup crude grades before the Russian invasion of Ukraine—back then, most such cargoes were going to Asia.
In March, refiners that had traditionally bought Russia’s flagship Urals blend – predominantly such in Finland, Poland, and Lithuania – purchased the highest volume of North Sea crude in many years—13.5 million barrels, according to Bloomberg’s data.
Europe has also raised oil imports from the U.S. in recent weeks, as the EU mulls an import ban on Russian crude.
While the EU is considering an oil embargo, Russia upped the ante on the gas supply front, by turning off the taps to Poland and Bulgaria on Wednesday, citing the two countries’ unwillingness to pay in rubles for Russian gas.
European Commission President Ursula von der Leyen warned European companies that agreeing to ruble payments would be a breach of the sanctions against Russia.
“Companies with such contracts should not accede to the Russian demands. This would be a breach of the sanctions so a high risk for the companies,” von der Leyen said on Wednesday, as carried by Bloomberg.
Earlier this week, Germany’s top importer of Russian gas, Uniper, said it believes it could continue buying gas without breaching the sanctions.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
The EU imports an estimated at 4.2-5.6 mbd or 30%-40% of its oil needs from Russia. There is not one single oil producer in the world or a group of producers including OPEC+ and US shale oil that can replace 8.0 mbd of Russian oil and products exports or even half of that now or in the next 20 years. OPEC+ has a very small spare production capacity and shale oil is a spent force.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London