Oil / Commodities - EU leaders agreed to pursue a partial ban on Russian oil, paving way for a sixth sanctions package to punish Russia and President Putin for the invasion of Ukraine. The sanctions would forbid the purchase of crude oil and petroleum products from Russia delivered to member states by sea but include a temporary exemption for pipeline crude. The latest sanctions package would cover more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine. Officials and diplomats still have to agree on the technical details. The European Commission has purposed to ban seaborne crude oil six months from inaction, while refined petroleum products would be halted in eight months. Shipments of oil through the giant Druzhba pipeline to central Europe will be spared until a technical solution is found that satisfies the energy needs of Hungary and other landlocked nations. The bulk of current pipeline deliveries are to Germany and Poland, which have signalled they will wean themselves off Russian supplies regardless of any EU action. If both countries follow through, the total effect, along with the latest ban on seaborne imports, would be cut to 90% of Russian crude oil sales to the EU by year’s end, or equivalent to $10 billion in lost export revenue for Russia. The newest sanctions package also proposes a ban on insurance related to shipping oil to third countries, but it will not take effect until six months after the adoption of such measures. Overall crude shipments edged higher in the seven days to May 27th, shrugging off mid-month EU restrictions that trading houses see as prohibiting them from dealing with Russian state energy companies. A total of 34 tankers loaded 25 million barrels from the country’s export terminals. That put average flows to 3.58 million barrels a day, up 4% from 3.44 million in the week ended May 20th.
Newsletter - May 31, 2022
Newsletter - May 31, 2022
Newsletter - May 31, 2022
Oil / Commodities - EU leaders agreed to pursue a partial ban on Russian oil, paving way for a sixth sanctions package to punish Russia and President Putin for the invasion of Ukraine. The sanctions would forbid the purchase of crude oil and petroleum products from Russia delivered to member states by sea but include a temporary exemption for pipeline crude. The latest sanctions package would cover more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine. Officials and diplomats still have to agree on the technical details. The European Commission has purposed to ban seaborne crude oil six months from inaction, while refined petroleum products would be halted in eight months. Shipments of oil through the giant Druzhba pipeline to central Europe will be spared until a technical solution is found that satisfies the energy needs of Hungary and other landlocked nations. The bulk of current pipeline deliveries are to Germany and Poland, which have signalled they will wean themselves off Russian supplies regardless of any EU action. If both countries follow through, the total effect, along with the latest ban on seaborne imports, would be cut to 90% of Russian crude oil sales to the EU by year’s end, or equivalent to $10 billion in lost export revenue for Russia. The newest sanctions package also proposes a ban on insurance related to shipping oil to third countries, but it will not take effect until six months after the adoption of such measures. Overall crude shipments edged higher in the seven days to May 27th, shrugging off mid-month EU restrictions that trading houses see as prohibiting them from dealing with Russian state energy companies. A total of 34 tankers loaded 25 million barrels from the country’s export terminals. That put average flows to 3.58 million barrels a day, up 4% from 3.44 million in the week ended May 20th.