In this list
LNG | Oil

Oil sanctions splitting global market, boosting 'grey' trade movements: TotalEnergies' Pouyanne

Energy | Oil | Refined Products | Jet Fuel

Jet Fuel

Market Movers Global, June 10-14: OPEC, IEA to release oil data; US Fed's interest rate decision in focus

Energy Transition | Oil & Gas | LNG

Beijing Commodity Market Insights Forum

Energy Transition | Electric Power | Natural Gas | Upstream | Coal | Renewables | Nuclear

Guangdong province's market-based power subsidy supports gas demand growth

Agriculture | Energy | Oil | Refined Products | Gasoline

The price of European Biodiesel

Electric Power | Energy Transition | Metals | Renewables | Non-Ferrous | Ferrous | Steel | Carbon | Emissions

Insight conversation: Alejandro Wagner, Alacero

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

Oil sanctions splitting global market, boosting 'grey' trade movements: TotalEnergies' Pouyanne


Consequences of EU bans, price cap not properly assessed

Sees prices supported by OPEC+, possible return to $100/b

  • Author
  • Nick Coleman
  • Editor
  • Jonathan Fox
  • Commodity
  • LNG Oil

Sanctions against Russia have split the global oil market, fostering the growth of a "grey" market and pushing up prices, TotalEnergies CEO Patrick Pouyanne said Feb. 8 after the stepping up of measures against Moscow by the EU and G7 countries following the invasion of Ukraine.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Referring to measures by the EU and G7, Pouyanne said at an investor presentation: "There is no more a world oil market. That is the big lesson of what's happening."

"We are splitting the market between Europe -- they have bans, there are some caps on prices -- we have today several markets, which does not help ease the price" of oil, Pouyanne said, going on to predict a potential return to prices above $100/b oil.

"We did not assess all the consequences of the growing grey markets for the supply of oil," he said.

On oil prices, Pouyanne said: "From our perspective there is more support for a higher price than $80 than a lower one. I would not be surprised to see $100/b coming back."

It follows the entry into force of an EU ban on Russian oil product imports on Feb. 5 and an earlier ban on Russian seaborne crude oil imports to the EU.

An agreement announced Feb. 3 by the G7 and partner countries will impose price caps of $100/b on imports of Russian products that typically trade at a premium to crude and $45/b on products like fuel oil that generally trade at a discount to crude.

TotalEnergies was previously stung by criticism that it was too slow to take a stance on the invasion of Ukraine and has since moved to dispose of several Russian assets. It retains, however, a 20% stake in Yamal LNG and continues to buy Russian LNG under a long-term offtake agreement.

In a fourth-quarter results statement, TotalEnergies noted an "uncertain environment," but also the efforts of the OPEC+ producer group to maintain prices above $80/b.

"The possible worldwide economic slowdown could be counterbalanced by the recovery of China, global demand being expected to rise in 2023 to more than 100 million b/d," the company said.

"Refining margins in Europe, particularly for distillates, are expected to remain supported by the effects of the European embargo on Russian petroleum products from Feb. 5."