The Oil and Gas Vertical magazine (No. 11/2022) published an interview with Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, about current events in the oil and gas markets.
Where will Russian gas and oil be exported to in 2023? What volumes will definitely be in demand by the foreign market?
- As you know, at present, about half of Russian oil exports and up to 65% of Russian oil products exports are under sanctions already imposed by the United States, Canada, Great Britain and Australia, or in the conditions of waiting for the appropriate EU embargo to come into force (from the 5th December for offshore supplies of Russian oil, and from February 5 of the next year - for the supply of Russian oil products).
In essence, Russia needs to divert up to 2.5 mb/d of oil supplies and about 1.8 mb/d of oil products to other export markets.
The risks of a reduction in Russian oil exports by about 1 million barrels per day (-20% compared to 2021), at least at the beginning of 2023, remain. In the future, we expect a gradual recovery in exports due to additional substitution of Middle Eastern oil in the markets of Southeast Asian countries.
Things are much worse with regard to the prospects for redirecting the export of oil products, since there are simply no free market niches comparable to the European market in the world.
Therefore, the European embargo on the supply of Russian oil products from the beginning of February 2023 will be the most serious challenge for the industry over the past 30 years.
Download the full interview (in pdf)
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