Page 33 - Russia OUTLOOK 2023

the EU. Unlike oil, the overwhelming majority of the EU’s imports are via
pipeline and Russia will not be able to redirect these flows, which accounted
for 55% of exports in 2021.

In the future, it is possible that the EU will again import gas from Russia. If so,
these flows should be subject to explicit price and volume restrictions agreed
at EU level.

Canada, the United States and Australia have banned all imports of
Russian oil, while the United Kingdom has announced a phase-down to zero
at the end of 2022. Given the limited dependence of these countries on Russia
(between 1% and 5% of demand), these announcements have no significant
impact.

The Czech Republic will continue receiving Russian oil through the
Druzhba pipeline’s southern branch for three more years, after which the
country will switch to the Transalpine (TAL) Pipeline, online newswire Idnes
reported late on Wednesday quoting Prime Minister Petr Fiala. “Czechia will be
dependent on oil supplies through the Russian pipeline Druzhba for three more
years. But starting from 2025, supplies of strategic crude will be secured
through the Transalpine Pipeline TAL, whose capacity will be expanded
significantly,” Fiala said as quoted by Idnes. Expansion of TAL’s capacity to
7–8mn tonnes per year of oil has already been approved by the management
of the companies that operate the pipeline. The expansion should be finished
in two years and cost around CZK1.2-1.6bn, or $51-68mn, Fiala said.

The European Union, which is much more dependent on Russian oil
imports (25% of demand), agreed only at the end of May 2022 to stop
seaborne imports of Russian oil at the end of the year. Only at the start of 2023
will more than 90% of Russia’s previous oil exports to the EU be banned.

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