• 3 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 7 minutes Saudi and UAE pressure to get US support for Oil quotas is reportedly on..
  • 11 minutes China devalues currency to lower prices to address new tariffs. But doesn't help. Here is why. . . .
  • 15 minutes What is your current outlook as a day trader for WTI
  • 9 hours Long Range Attack On Saudi Oil Field Ends War On Yemen
  • 2 hours Maybe 8 to 10 "good" years left in oil industry * UAE model for Economic Deversification * Others spent oil billions on funding terrorism, wars, suppressing dissidents * Too late now
  • 6 hours Will Uncle Sam Step Up and Cut Production
  • 13 hours In The Bright Of New Administration Rules: Immigrants as Economic Contributors
  • 26 mins Domino Effect: Rashida Tlaib Rejects Israel's Offer For 'Humanitarian' Visit To West Bank
  • 25 mins 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 21 hours Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 36 mins CLIMATE PANIC! ELEVENTY!!! "250,000 people die a year due to the climate crisis"
  • 1 day NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 22 hours Continental Resource's Hamm wants shale to cut production. . . He can't compete with peers.
  • 48 mins Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 1 day Significant: Boeing Delays Delivery Of Ultra-Long-Range Version Of 777X
  • 1 day Why Oil is Falling (including conspiracy theories and other fun stuff)

U.S. Mulls Fresh Sanctions On Russian Oil

Russia

Russia’s oil firms are demanding penalty clauses and payments in euros instead of U.S. dollars in their annual renegotiation of oil supply contracts with Western crude buyers, as the Russian oil industry is seeking to protect itself from possible new U.S. sanctions on the sector, Reuters reports, citing a number of industry and trading sources.

Buyers, however, are unwilling to yield to the demands.

U.S. lawmakers have been discussing extending sanctions on Russia to energy and oil projects and sovereign debt markets in what Republican Senator Lindsey Graham called a “sanctions bill from hell.”

Just yesterday, the U.S. Department of the Treasury imposed additional sanctions on officials and entities supporting Russia’s occupation of Crimea, designating three individuals and nine entities for profiting from the annexation of Crimea.

None of the targeted companies are oil companies in this round of sanctions, but the Russian oil industry has apparently grown concerned about sanctions coming its way.

According to Reuters’ sources, Gazprom Neft and Surgutneftegaz, Russia’s third- and fourth-largest producers, respectively, are having very tough talks with trading houses and Western oil majors who buy their oil. Looking to protect themselves in the 2019 annual contracts from possible sanctions, the Russian firms have demanded clauses such as penalties to be paid if buyers fail to pay, sanctions or not. For most of the Western buyers, these demands are unacceptable, and talks with Gazprom Neft and Surgutneftegaz have been progressing painfully, according to industry sources who spoke to Reuters. Some have reached compromises—one large European buyer has agreed to pay in euros in exchange for Surgutneftegaz dropping the penalty clause.

Related: The Energy Investment Model With A Glaring Problem

Earlier this week, Reuters reported that Russia’s biggest oil producer Rosneft was also in a deadlock with Western oil buyers over the 2019 contracts. The major buyers are fiercely opposing penalty clauses, trading sources told Reuters.

Commenting on Gazprom Neft and Surgutneftegaz’s impasse with buyers, a source with a big trading house told Reuters: 

“They basically said - sanctions don’t matter. Buyers have to find a way to pay, or to return purchased goods, or pay penalties.”

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Donald on November 12 2018 said:
    Penalties end after Russia evacuates Donbass and Crimea. Both regions of Ukraine are scorched earth without jobs, schools, electricity, coal, postal service, government, banks, water. Russia signed a NATO treaty guaranteeing the borders of Ukraine in return for Ukraine divesting its huge supply of nuclear weapons. NATO will honor the treaty for a hundred years. The Russian invasion of Ukraine cost Russians extreme poverty. Some Russian states 40% of the population earn less than $200/month. The Russian Army is pinned down in Donbass unable to maneuver because NATO counter battery artillery and antitank weapons are accurate to five meters on the first shot and at distances up to 20 miles. The best cure for sanctions is for Russia to vacate Ukraine and honor the treaty they signed. Otherwise the vice will tighten for the next hundred years.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play