In its World Energy Investment…
A fire erupted on Wednesday…
Rosneft is offering as many as 37.4 million barrels of the flagship Urals crude for May and June loadings, according to a tender document seen by Bloomberg—a sign that Russia’s top oil producer is racing to award spot tenders before any possible EU embargo on Russian oil comes into force.
The massive tender offer from Rosneft surprised traders in Europe and Asia, who told Bloomberg that it is not typical for the Russian oil giant to seek such short-term and large-volume sales.
The tender offer is for Urals loading and departing from Russia’s western ports. Rosneft has said it prefers Russian rubles as payment, although in theory, buyers could pay in U.S. dollars, euros, yuans, the UAE’s dirham, or Turkish lira, according to the document seen by Bloomberg.
Rosneft also wants 100-percent pre-payment on the provisional value of the Urals cargoes.
All these stipulations from Rosneft in the firesale tender suggest that Russia and its oil giant are looking to get paid and get the crude sold before a potential EU ban on Russian oil imports.
Many buyers in the West have shunned Russian oil since Putin’s invasion of Ukraine, and major international traders have also said they would either cut or phase out purchases of Russia’s crude.
The world’s top independent oil trader, Vitol, plans to wind down its activities involving Russian crude oil by the end of this year, Bloomberg reported last week, citing a spokesman for the company.
Trade with Russian oil “will diminish significantly in the second quarter as current term contractual obligations decline,” the spokesman said, adding, “we anticipate this will be completed by end of 2022.”
Putin is confident that Russia can find new willing buyers for its oil in Asia. Buyers in Asia—especially China and India—are taking some of the oil unwanted in the West. Still, logistics, high freight rates, insurance, bank guarantees, and payment hurdles prevent willing buyers in Asia from purchasing all the oil Russia has traditionally sold on the European market.
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.