In this list
Oil | Shipping

Factbox: EU ban on Russian seaborne oil to intensify shifts in trade flows

Shipping | Marine Fuels

Platts Bunkerwire

Commodities | Crude Oil | Electric Power | Electric Power Electricity | Energy Natural Gas | LNG | Metals | Natural Gas | Refined Products | Shipping | Containers | Wet Freight

Market Movers Europe, April 15-19: Escalating conflict in the Middle East puts oil markets on high alert

Oil | Energy Transition | Energy

APPEC 2024


Interactive: The Platts Benchmark Heatmap

Refined Products | Shipping | Marine Fuel

Bunker Fuel Price Assessment

Agriculture | Chemicals | Energy Transition | Fertilizers | Renewables | Pesticides | Food | Emissions

Unpacking mitigation, adaptation pathways toward sustainable agriculture

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

Subscribe Now

Factbox: EU ban on Russian seaborne oil to intensify shifts in trade flows


Russian oil supply losses seen reaching at least 2 million b/d

EU looks to US, Middle East, WAF suppliers to replace Russian oil

Asian buyers eager for discounted Russian Urals

  • Author
  • Paul Hickin    Nick Coleman    Robert Perkins
  • Editor
  • Alisdair Bowles
  • Commodity
  • Oil Shipping

The EU has agreed to ban Russian oil imports by sea, amounting to more than two-thirds of Russian crude deliveries to the bloc, in a move expected to further reshape global energy flows and add to price pressures as buyers seek alternative supplies.

Not registered?

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

Register Now

Brent crude futures for August were up by 1.6%, or $1.92/b, at $119.51/b in mid-morning European trade after the announcement.

Ahead of the EU decision, S&P Global Commodity Insights on May 27 forecast a loss of nearly 2 million b/d in crude and products supply from Moscow by year-end, as more buyers shun Russian oil.

Below are key factors to watch:


-- Russian Urals crude price discounts have widened as many refiners have turned to other supplies.

• Urals has traded at record-lows since the Ukraine invasion, with some deals done at a discount of almost $40/b to the Platts Dated Brent crude oil benchmark. The Urals-Med differential was assessed at minus $34.9/b on May 30 by S&P Global Commodity Insights.

• In the 0.1% gasoil and ultra low sulfur diesel markets, from June 1 Platts Northwest Europe and Mediterranean assessments will reflect non-Russian origin material, while a new assessment for all-origin, inclusive of Russian material, CIF NWE ULSD cargoes is also being launched.

• CIF NWE ULSD cargoes were assessed at a $1.50/mt premium over the front-month ICE LSGO futures contract on May 31, while CIF Med ULSD cargoes were assessed at a $39/mt premium May 31.

• After news of the EU ban, the front month ICE low sulfur gasoil futures contract, currently June, was trading around $1,268/mt in mid-morning trade May 31, up from $1,195.50/mt at 16:30 London time May 30.

-- Middle East grades could be the big winners, with the region's supplies well positioned to replace Russian barrels.

• Traders anticipate a rise in Middle Eastern official selling prices bound for Europe as European refineries seek alternative sour barrels. Meanwhile some Asian buyers have been snapping up Russian cargoes due to sharp discounts.

Trade flows

-- Europe is heavily reliant on Russian oil, meaning it will take time to diversify supply, but new dynamics are emerging.

• Urals is a medium sour crude that has been a staple for refiners in Northwest Europe and the Mediterranean. Before the invasion Europe was particularly dependent on Russian oil and was importing about 2.7 million b/d of crude and another 1.5 million b/d of products, mostly diesel.

• Germany, Europe's largest consumer of Russian energy and second-largest buyer of Russian crude, has seen most of its refiners and oil importers switch away from Russian supplies in recent weeks, allowing the country to slash its dependence on Russian crude to 12% of imports from 35% before the invasion of Ukraine.

• West African crude is heading to Europe instead of to India and China as Asian buyers snap up heavily discounted Russian barrels. Light and medium sweet Nigerian crudes with high middle distillates yields are being snapped up by European refiners seeking to maximize runs and cash in on record margins.

• Angolan crudes, which are typically reliant on Chinese demand, have been heading to Europe in greater volume, often at steep discounts. Angola exported 318,000 b/d to Europe in April, its highest level since August 2016, according to Kpler shipping data.

• Strong exports of US Gulf Coast crude are expected into Europe in the coming months as the US continues its release of 180 million barrels in strategic stocks through October, adding 1.3 million b/d in incremental supply to the market from April through October, according to S&P Global data.

-- Replacing Russian diesel will be hard and could add to cost pressures for consumers.

• Self-sanctioning by European refiners and independent traders has already slashed seaborne imports of Russia's Urals crude, heavy fuel oil, vacuum gasoil and naphtha.

• Germany was buying most of its Russian Urals crude via the northern branch of the Druzhba pipeline system, which in past years shipped about 1 million b/d of crude from Russian fields to central Europe.

• Before the war, 60% of European imports of diesel were coming from Russia, a dependency that rises to 70% for Northwest Europe, while in the Mediterranean 25% of diesel imports were coming from Russia, according to Kpler data.

• Exports of ultra low sulfur diesel from the Russian Baltic port of Primorsk in May were set to fall 29.5% on month to around 1.1 million mt.

-- Some European countries may find it difficult to switch due to infrastructure constraints.

• Landlocked Hungary, which is about 60% import-dependent on Russian oil, had previously objected to sanctions on Russian energy on the grounds it needs Russian crude to supply its sole refinery.

• Hungary's Duna and Slovakia's Slovnaft refineries, both owned by Hungary's MOL, process crude predominantly delivered via Druzhba. However, they can also be supplied with seaborne crude via the Adria pipeline, which brings crude from the Omisalj terminal on the Croatian island of Krk.

• About two-thirds of Slovakia's crude supplies are also shipped from Russia by the southern arm of the Druzhba pipeline, which runs through Belarus and Ukraine and continues to the Czech Republic. Slovakia has said, however, it could meet most of its crude needs through increased use of the Adria pipeline, also known as JANAF.


-- The Druzhba pipeline is a key supply route for Russian oil to Europe.

• Urals crude is exported via the Druzhba pipeline, a branch of which runs through Ukraine, as well as via seaports Primorsk and Ust Luga in the Gulf of Finland, and Novorossiisk on the Black Sea. Around 1 million b/d was flowing through the Druzhba system from Russia to Europe before the war.

• Ukraine ships Russian oil to Slovakia, Hungary and the Czech Republic via the southern leg of the Druzhba.

-- Displaced Russian crude has been heading into Asia, mostly India, putting more strain on supply chains and limited pipeline infrastructure.

• Russia will become more reliant on customers in Asia. China was the largest buyer of Russian crude before its latest round of COVID lockdowns dampened demand. India imported 836,000 b/d of Urals crude in April compared to just 274,000 b/d and zero in March and February respectively, according to data from commodity intelligence firm Kpler.

• Russian seaborne crude imports into Europe fell by around 600,000 b/d in March and April, from 3 million b/d in February, according to Kpler.

• Total shipments of Russia's medium sour Urals crude scheduled for May stood at 8.71 million mt, down 545,000 mt from April. On a barrels per day basis, combined May loadings of Urals were scheduled to be 199,058 b/d lower than April at 2.03 million b/d, using a conversion factor of 7.23 barrels/mt.

• Imports of Russian ultra-low sulfur diesel into the UK are set to slump 35% month on month to around 65,945 mt in May, and down 171% from May 2021, according to tanker tracking and loading data May 25.