The amount of Russian oil shipped to Europe, falling, whereas deliveries to China are growing. Western analysts argue that this is directly linked to the political confrontation between Russia and the West. However, there is another version, and the policy in this case, it seems, has not too much importance.
During the first five months of 2018 through the ports of the Baltic and Black seas in Europe was delivered 19% less Russian oil than in the same period of 2017. The relevant calculations were made by the experts of the Agency “Bloomberg”. At the same time, oil deliveries to China from Russia increased by 43% in the first three months of 2018, the volume of shipments amounted to 750 thousand barrels a day, said Transneft.
If this tendency continues, Moscow on the European market, apparently, will replace the Middle East and the United States, experts say Bloomberg. Meanwhile, Russia just three years ago pushed Saudi Accident and Angola in China and has become a leader in the export of oil to this country. The historical maximum was reached in 2016, when Russia supplied China with more than 1 million barrels per day.
Thus, experts believe that there is redrawing the world oil market, the redistribution of influence. Analysts believe that the causes should be sought in world politics – apparently, in particular in the aggravation of relations between Russia and the West. And the first events will suffer from sea carriers and Russian ports, they say. Whether so it actually?
One can hardly argue seriously that Russia leaves Europe and preoriented exclusively to the East. Europe still buys Russia has more oil than any other region: 1.86 million barrels per day. Although the trend of increasing oil supplies to Asian markets is evident and there is already not the first year.
“The oil really goes into Asia with the European market primarily to the oil pipeline “Friendship”. But here it’s not even the turn to the East due to the political situation and economic projects,” – says a leading expert of the national energy security Fund Igor Yushkov. When selling oil to Asia, Russian companies are getting more profit than when you export it to Europe.
How does it happen?
“If oil is extracted in Western Siberia, is pumped into pipe low-sulfur crude oil Siberian Light. But when she goes to Europe, for example through Belarus, then mixed with sour oil Volga, and the output is the Urals crude oil with an average sulfur content. In the end, outlet sell oil at a lower price than if sold crude oil Siberian Light. If you are pumping this oil from Western Siberia to the ESPO pipeline, the output is the same sweet crude oil Siberian Light and sell it at a premium. Therefore, Russian companies more profitable to swing to the Eastern direction. Hence there is such intense competition for access to ESPO,” explains Yushkov.
The rapid growth of oil supplies in the East this year due to an increase in the new year throughput ESPO – from 15 to 30 million tons per year. This is the main channel for the supply of Russian oil to China. Also deliveries go in other directions through Kazakhstan swings about 10 million tons of oil. “In addition, the company hit oil at the ESPO pipeline to Nakhodka, it is charged with tankers and supply in Asia, including in China. Plus some oil from Sakhalin also goes to China”, – the expert adds.
There are plans for further expansion of capacity East of the pipeline. According to Transneft, in 2019 the capacity of the ESPO pipeline will increase to 50 million tons per year, in 2020 up to 80 million tons. In Europe capacity is also expanded, but less ambitious. So, Transneft increased the transportation of fuel in port Primorsk from 8 to 15 million tonnes (“Sever” project), as well as increased transport fuel from the Volgograd refinery in the port of Novorossiysk 6 million tonnes (“South”). However, in Europe, Russia is trying to increase the supply of petroleum products, not crude oil.
“The European direction is less than the margin of difficulty with the administrative regulation, higher political risks. To invest in capacity expansion of ports and pipelines is risky – and suddenly you find that the volume is not in demand or the price of oil fell. Therefore, the European oil market for the coming years, in my opinion, will be less of a priority,” says Georgy Vashchenko of IR “freedom Finance”. In Asia, the growth of consumption of hydrocarbons is growing and Russian companies earn more.
The threat of ousting Russia from the European market, American or middle East oil is greatly exaggerated. “With the oil market, it’s easier than a gas market where there is fierce competition. The oil market is global, so there is no threat that we expel someone in Asia, and he will come to Europe and drive there, no. We have no problems with the sale of oil, we have a problem with oil production. How much we will produce, as we have oil and will buy”, – says Igor Yushkov. And if Iran once again will be sanctioned and will be less to produce, he will have to remove certain exports from China. Therefore, Russia’s position in the Asian markets is quite strong.
“I don’t think there is a great danger for Russia because of oil exports from the US to Europe. The more Americans export, the more they import. They can’t provide oil. If the Americans extracted oil as much as they need, and on top of that, and would become net exporters, then it really would be for Russia threat. And now there is no competition,” says the source.
The logic of American manufacturers is purely economic: where it is advantageous to supply oil on the internal or the external market is there and they deliver. The fact that US exports more expensive high quality oil and get good money for it, and import, usually cheap and low quality oil because their refineries can process heavy oil. Tankers carry the oil to Asia or to Europe – a big difference in price there.
Approval of the Western press that the Russian ports of the Baltic and Black seas will be seriously affected by such a redistribution of the oil market, the Russian expert also rejects.
“On the contrary, most pipelines in Europe can lose in volume. The volume of supply through the pipe “Druzhba” annually reduced,” – said the expert of the NESF.
On nedozagruzheny Soviet pipe says Transneft’s proposal to put the pipe in reverse mode Belarusian oil products (made from Russian oil) back to Russia to Yaroslavl, where the current pipes to send to Ust-Luga and the rest of Europe. This idea is studied in the framework of Russia’s desire to Belarusians refused to drive the oil through the Baltic ports and the Russian ports were loaded.