Africa-Press – Botswana. Crude oil futures prices reached, on Monday (7), in London, a 14-year high in the early morning of trading, with Brent, a reference for Angolan exports, being fixed at a value of 130.89 dollars, the highest value since July 22, 2008.
This occurred after the authorities of the United States of America (USA) informed the start of the conversations.
sions with allies to ban Russian oil imports.
In reaction to the market, the ICE Brent futures contract, for delivery in May, was traded more than 9.17 dollars/bbl (7.76 percent) above the previous close, stabilizing at 127.28/bbl.
Russia exports oil to many countries. Europe imports the biggest cake with around 2.7 million barrels of oil per day (MBPD) of crude crude and 1 MBPD of raw materials/refined products. Next is Asia, mainly China, with 2.3 MBPD of oil and refined products. The third largest importing region is the United States, with 0.6 MBPD.
Russia is subject to major international financial sanctions, since the conflict with Ukraine started on February 24, it produced an average of 10.52 MBPD in 2021, equivalent to just over 10 percent of global consumption. So far, Russia’s allies in OPEC+, Saudi Arabia and the United Arab Emirates, have avoided being drawn into growing international actions against the Kremlin and have not offered to address shortfalls in crude supplies.
Of the 23-nation alliance, only Saudi Arabia and the United Arab Emirates hold any significant idle production capacity, although both countries are so far unwilling to increase their production quotas.
However, the extra production capacity of these 2 countries is considerably below the 6.5 MBPD exported daily by Russia.
Russian oil import restrictions, if implemented, would have very different effects on supply depending on the region and type of product (crude/refined), but all markets will have an impact on prices.
For Europe, in addition to crude oil, a key issue is the supply of diesel from Russia. If a ban were imposed on these imports, Europe could release around 200 MMBBLS of diesel in strategic “stock” to help cover the differential.
Russia was the 3rd largest source of crude oil imports to the UK, accounting for about 11 percent of the external supply, and was the 2nd largest source of imported petroleum products, equivalent to 16 percent of the total imported.
For the US, the biggest effect may be for US Gulf Coast refiners, which import VGO raw materials/waste from Russia used to produce light products such as gasoline or diesel. The loss of these raw materials would drive refiners to look to other sources that could be challenging or even process more crude.
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