Page 6 - MEOG Week 10 2022
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MEOG                                          COMMENTARY                                               MEOG





























       Asian refiners





       consider their options







       Asian refiners appear to be looking at limited impact from Russia’s invasion of

       Ukraine so far, but are increasingly keen to resume crude imports from Iran.




        GLOBAL           ASIAN refiners are considering their next steps  Asia accounted for nearly 35%.
                         in the wake of Russia’s invasion of Ukraine. Asia   According to the report, Russia’s crude
                         is not as exposed to Russian crude as Europe,  exports to Asia reached 1.44mn bpd in 2021,
       WHAT:             but still stands to be affected by the conflict as  with 805,000 bpd – or 56% – going to China.
       Asian refiners are eager   oil prices rise and dealing with Russia becomes   Reuters had a higher figure, however, saying
       to resume crude imports   more complicated owing to a growing number of  that China’s imports of Russian oil had averaged
       from Iran.        sanctions against the country.       1.59mn bpd in 2021, accounting for 15.5% of
                           Against this backdrop, Asian refiners may not  its total crude imports. The Reuters figures also
       WHY:              rush to stop doing business with Russia – and  showed that Russia was the fourth-largest sup-
       Their exposure to Russian   indeed could snap up discounted Russian oil  plier of crude to South Korea in 2021, and the
       crude is limited, but they   cargoes that have been rejected by other buyers.  fifth largest seller of oil and gas – in the form of
       are affected by rising oil   However, they could still start looking for  LNG – to Japan.
       prices.           replacement sources of crude in case those are   Regardless of the disparity between the fig-
                         considered necessary at a later date as the sit-  ures being reported by different outlets, this
       WHAT NEXT:        uation continues to evolve. And resuming oil  illustrates that enough Russian oil is sent to Asia
       There is also a possibility   imports from Iran now looks like an increasingly  for it to have an impact if supplies are disrupted.
       that Asian refiners could   attractive prospect that could help relieve some
       snap up discounted   of the upward pressure on crude prices.   Response
       Russian crude rejected                                 Following the Russian invasion of Ukraine, sev-
       by others.        Impact                               eral countries were quick to respond with sanc-
                         Excluding China, Russian oil only accounts  tions, including the US, the UK, Australia and
                         for 1-6% of imports to Asia, according to S&P  European Union members. Some Asian coun-
                         Global Platts.                       tries were also involved in the initial sanctions.
                           However, even 1-6% of total imports is not   Those initial sanctions targeted Russia’s econ-
                         an insignificant amount. The Oxford Institute  omy but not oil supplies or energy payments.
                         of Energy Studies (OIES) said in a new report  Indeed, the US was quick to note that energy
                         this week that Russian crude exports averaged  payments would not be affected by restriction
                         4.27mn barrels per day (bpd) in 2021, with  on Russia’s access to the SWIFT payment system.
                         Europe comprising around 60% of this, while  However, given that an invasion of Ukraine had



       P6                                       www. NEWSBASE .com                         Week 10   09•March•2022
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