February 5, European Union (EU) started banning the import of fuel Russian refineries such as diesel, kerosene and fuel oil in an attempt to limit Mosvka’s main sources of revenue.
This move is expected to cause significant changes in the global oil trade, especially diesel – an important fuel source of the economy.
The ban on imports of Russian oil products took effect at the same time as the ceiling price of these products introduced by the Group of Industrialized Countries (G7), thereby extending the ban on transportation activities. shipping Russian oil by sea, which took effect from December 2022.
The new measure, which prohibits EU ships carrying Russian-origin petroleum products from being traded at or below the set price ceiling, also applies to technical assistance, brokerage or financial firms such as insurance company for carriers refined petroleum of Russia. Penalties for violating companies can be up to 5% of global revenue.
The EU, G7 and Australia countries have also reached an agreement on the ceiling price that will apply to Russian oil products from February 5, at 100 USD/barrel respectively for high-end products such as: diesel and $45/barrel for cheaper products such as fuel oil.
Analysts say the measure could exacerbate the energy crisis and inflation across Europe and North America, and add to the risk of a recession for the world economy.
Diesel prices, which have been soaring since the Ukraine conflict broke out nearly a year ago, are forecast to continue rising after the EU’s new move. Particularly in 2022, the price of diesel in Europe has increased from 1.66 euros/l to 2.14 euros/l. Rising energy prices are a key driver of inflation in Europe, which has already prompted consumer spending to tighten and economic activity to slow.
Supply from Russia is limited, Europe must increase diesel imports from Asia and the Middle East. However, longer shipping distances and higher demand for fuel tankers entering Europe mean that freight rates are rising, adding to costs for consumers. Moreover, it is likely that the oil supply in 2023 will not meet the demand when the Organization of the Petroleum Exporting Countries and its partners (OPEC +) still maintains the policy of cutting output.
Expert Ole Hansen, head of commodity strategy at Saxo Bank, said that when the new EU ban is applied, gasoline prices and especially diesel prices will remain high, especially if the measure ban is accompanied by a price ceiling of 100 USD/barrel for diesel. Diesel supplies from the US and the Middle East can make up for it, but shortages will remain in the short term.
Matthew Sherwood, an analyst from the Economist Intelligence Unit (EIU), said the new EU measure will cause some disruption, especially soon after the ban is implemented, but EU markets are still continuing. Looking for alternative sources of supply leads to an increase in the price of oil products in general. In addition, shipping and pricing issues are major concerns, with Eurasia Group analysts believing the new ban will lead to logistical, warehousing and ultimately cost challenges. higher shipping.
[Châu Âu đổ xô tích trữ dầu diesel trước lệnh cấm nhập sản phẩm dầu Nga]
According to Hedi Grati, head of fuel and refining research at S&P Global, if the new measure seriously disrupts Russia’s diesel exports to the EU, the bloc will have to look for other sources of oil. replacing, facing competition with other big importers, causing price pressure to increase continuously. In case the ceiling price measure does not affect Russia’s diesel exports too much, the price pressure will only increase in the short term as the market needs time to adapt.
The supply situation could only improve by the end of 2023 when new refinery projects, in Kuwait and Saudi Arabia, are expected to come online, helping to increase global diesel production and boost flows to Europe. help alleviate the energy crisis.
The EU ban also raised concerns that supply chains could be disrupted. Many analysts warn the EU ban will likely cause more disruption than the previous crude oil ban, and the markets will panic.
Over the past week, buyers have rushed to fill European storage tanks with Russian diesel, with purchases this month estimated to hit a one-year high.
Europe’s diesel imports have averaged 700,000 bpd since the start of 2023, the highest since March 2021, as traders rushed to buy ahead of the ban, according to oil analysis firm Vortexa. .
In addition, energy analysts also assessed that the new EU ban along with the G7 price ceiling measure could lead to a reallocation of refined oil supplies.
An employee pumps gas to a vehicle at a gas station in Paris, France. (Photo: AFP/VNA)The director of the International Energy Agency (IEA) Fatih Birol said that in the second half of 2023, refining capacity will increase significantly as new plants in the Middle East come into operation, the process of reallocation of supply will taking place worldwide.
Meanwhile, the Kremlin has warned global energy markets will be more volatile when the EU bans Russian oil products, but Moscow is taking measures to protect its interests against risks related to Russian oil products. mandarin.
When the EU, G7 and Australia imposed price ceilings on Russian oil exports, Moscow also announced a ban on selling oil to countries and companies that applied the ceiling price. Analysts believe Moscow can direct refined oil exports by sea to China, India, the Middle East and Africa.
Some opinions also do not rule out the possibility that the new EU measure will not bring the expected results of limiting Russia’s revenue.
Stephen Brennock, senior analyst at PVM Oil Associates in London, said that the Russian crude oil ban implemented in December 2022 did not cause the severe impact on Russian revenue as previously forecast. Crude oil loaded on ships in Russia’s Baltic ports in January 2023 is forecast to increase by 50% compared to December 2022.
India’s December crude oil imports jumped to a five-month high as the country actively bought more crude from Russia. Meanwhile, China was Russia’s second largest buyer of Urals oil in January. China and India have long been importers of Russian crude oil to bring home for refining. Therefore, these countries can easily increase the amount of crude oil imports at preferential prices to refine instead of buying more refined products.
In general, sanctions will take time to assess results and impacts, while the implementation process will be influenced by many factors. However, the risk of socio-economic troubles within the EU in particular or Europe in general becoming more serious is something that must be taken into account.
These impacts may gradually spread and affect to a certain extent the global economy, which needs to be stabilized to recover from the COVID-19 pandemic.
(VNA/Vietnam+)