Russian oil supplies hold for now The upper limit on prices imposed by the G7 and the European Union (EU) embargo Limiting the impact of sanctions on derivatives on world prices, the European Central Bank (ECB) warned of the potential upward impact of some of the measures implemented on prices.
“Russian oil supplies have resisted the embargo imposed by the European Union and the G7 price ceiling, which has limited the impact of sanctions on world oil prices,” the eurozone central bank wrote in the summary of the presentation of one of the articles. latest economics newsletter.
In his analysis, economists European Central Bank Highlighting that Russia redirected much of its oil supply before the EU embargo came into effect and the G7 price ceiling in 2022 after making a significant change in trade patterns and diverting the crude oil it previously transported to the EU by sea to the Asian market.
In this way, before the entry into force of sanctions in November 2022, While China and India accounted for 70% of Russia’s oil exports, it was just under 20% before the war.
Russian crude oil exports
Likewise, the introduction of these sanctions initially resulted in a notable decrease in Russia’s export of crude oil by sea,”Volumes have since recovered, reflecting a greater diversion of crude oil from sanction-imposing countries to non-sanctioned countries, While available statistics are incomplete, a significant amount of Russian crude is classified as being loaded onto tankers with an undisclosed destination.
Economists estimate that Russia’s seaborne crude oil export volume is on average.Compared to export volumes in November 2022, crude oil has remained virtually unchanged since sanctions were imposed.
On the other hand, they also state:World oil prices exhibited limited fluctuations, Despite the introduction of sanctions, with a 9% drop in international oil prices since last December 5th.
In the case of Russian Uralic oil, which is mainly exported to Europe, it continued to be quoted at a discount, which was extended immediately after the imposition of the sanctions.While in the East Siberian-Pacific Ocean (ESPO) variant, although it has reverted to levels before December 2022Traditionally, exports to Asia remained close to international oil prices and above the applicable ceiling price.
Sanctions on world oil markets
on your side, ECB economists warn that the European diesel market remains tight. Despite the EU strengthening its imports of refined oil.
Like this, Recognizing that the stronger impact of sanctions on global oil markets may still occurFuture reassessments may test whether the sanctions are working as intended, as the countries that impose the sanctions plan to keep the cap level at least 5% below the market price of Russian oil.
On the other hand, Eurozone central bank economists argue that the embargo and the corresponding ceiling price mechanism for refined petroleum products they are still at an early stage of implementation, meaning there is still great uncertainty about the ultimate impact on the refined petroleum products markets.
In this sense, they warn, over time, “The embargo may add additional price pressures on the already tight European diesel market” cIn the EU, these suppliers have to bid for barrels of diesel from the United States and the Middle East in competition with their traditional customers.