Russia's Oil Exports to Europe Decline as Quality Worsens

Posted by Michelle Howard
Tuesday, May 8, 2018

Russia has exported less crude oil to Europe this year as the quality of the fuel on offer deteriorated and tense diplomatic relations prompted it to redirect more volumes to China.

Russia increased oil pipeline exports to China by almost 50 percent in January-April from a year earlier to 12.4 million tonnes, Igor Dyomin, a spokesman for Transneft, Russia's oil pipeline monopoly, said on Tuesday.

Moscow has embarked on a so-called "pivot East" strategy and tried to boost ties with Asia as its relations with the West have chilled over Russia's role in Ukraine's conflict and its alleged meddling in the U.S. presidential election in 2016.

The increase in oil supplies to China has resulted in a worsening quality of Europe-bound Urals blend, including an increase of unwanted sulphur content.

Dyomin said that Hungary, Slovakia and Poland cut Russian oil imports by around 10 percent in January-April, and shipments to Europe via the two branches of the Soviet-built Druzhba pipeline declined by 225,000 tonnes to 15.75 million tonnes in the first fourth months of the year.

"The decrease in purchasing volumes happened as the countries want to get oil with sulphur content of 1.5 percent, though the sulphur content is capped at 1.8 percent in the contract," Dyomin said, adding the figure stands at 1.75 percent now.

According to Reuters calculation, the sulphur content in Urals as of February had increased on average by 0.15 percent from 2017.

There are no legal consequences for Urals' quality falling below the standards, but it has dampened its price and prompted buyers to think about the possibility of reducing the volumes they buy, according to traders and sources close to European refineries.

Reporting by Vladimir Soldatkin

Categories: Government Update Logistics Shale Oil & Gas

Related Stories

Finder Energy Buys Petrojarl I FPSO for Timor-Leste Oil and Gas Projects

Mubadala Energy, PLN Energy Primer Team Up for Andaman Sea Gas Supply

Greater Sunrise Moves to Next Phase with Timor-Leste, Woodside Deal

Pakistan Greenlights TPOC-Led Offshore Exploration in Block-C

TechnipFMC to Supply Subsea Systems for Eni’s Maha Deepwater Project

Eneos Warns on Skyrocketing Costs fo Offshore Wind

Sponsored: Record Deals and Record Attendance Underscore ADIPEC’s Global Impact

Sponsored: Energy and Finance Chiefs Call for Sound Policy, Stable Frameworks at ADIPEC

Sponsored: Energy Sector Urged to Scale AI Adoption at ADIPEC

Sponsored: Policy, AI, and Capital Take Center Stage at ADIPEC 2025

Current News

Eni Expands Asian Footprint with Long-Term LNG Contract in Thailand

Finder Energy Buys Petrojarl I FPSO for Timor-Leste Oil and Gas Projects

CNOOC Puts New South China Sea Development Into Production Mode

ADES Nets $63M Contract for Compact Driller Jack-Up off Brunei

Mubadala Energy, PLN Energy Primer Team Up for Andaman Sea Gas Supply

BP Hires Seatrium to Deliver Tiber FPU in Gulf of America

Venture Global, Tokyo Gas Ink 20-Year LNG Supply Deal

Greater Sunrise Moves to Next Phase with Timor-Leste, Woodside Deal

Russia Seeks to Boost Oil Exports to China as Sanctions Tighten

Blackford Dolphin Semi-Sub to Keep Drilling Offshore India

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com