Page 9 - FSUOGM Week 17 2022

FSUOGM POLICY FSUOGM

Rosneft oil tender demanding

rubles fails to find buyers

RUSSIA RUSSIAN state oil company Rosneft has failed to “Specific terms and a thin timeframe require
secure buyers in a tender for oil exports in which individual negotiations,” a source at an Asian
Rosneft is following the it demanded prepayment in rubles, traders told trading firm said, noting that some of the oil
Kremlin line in pushing Reuters on April 25. that was offered could be sold in private deals.
for increased payment Russia is seeking to remove euros and US dol- Another source said that the main aim of Ros-
in rubles. lars from all its energy transactions, in order to neft’s tender was to “announce a ruble payment
bolster the value of the ruble, which has already requirement to the market,” which was achieved,
recovered from a slump in the weeks after Mos- even if no oil was actually sold.
cow launched its invasion of Ukraine in late Russian oil exporters have been struggling
February. It is also anxious to avoid holding too to find buyers for their oil as it is, because of
much foreign currency lest it be frozen as a result transaction complications caused by sanctions
of future sanctions. and buyers actively avoiding Russian pur-
Rosneft launched a tender last week for the chases. Russian oil pipeline operator Transneft
sale of 6.5mn tonnes (48mn barrels) of Urals, even had to start restricting oil intake into its
Siberian Light, Sokol and ESPO blend crude, to system in March, according to Reuters, as stor-
be dispatched from Russian ports in May and age levels had built to the brimming point with
June, according to Reuters. But no bids had been unsold oil. According to Bloomberg, Russian
received by April 25. oil output slumped to its lowest level in two
Traders told the news agency it would have years in early April as a result of the disruption.
been hard enough to tender terms even without If maintained for the whole of the month, the
the requirement to pay in rubles, as many Euro- decline would be around 500,000 barrels per
pean majors and trading firms are shunning pur- day from the level in March, the news agency
chases of oil from Russia. said. ™

EU prepares "smart sanctions"

against Russian oil

EUROPE THE EU is preparing “smart sanctions” against it consumes. Several EU states including Poland
Russian oil imports that increase pressure on and Lithuania have called for an outright ban on
Thus far, Brussels is yet Moscow while limiting the impact on European Russian oil imports, although Germany, Hun-
to draw up a firm plan economies, the European Commission’s vice gary and other states that are more dependent
for ending reliance on president Valdis Domnbrovskis told The Times on Russian supplies have opposed an immediate
Russian gas. on April 25. embargo.
“We are working on a sixth sanctions package Such an embargo would cause a significant
and one of the issues we are considering is some dent in Moscow’s export revenues. Europe
form of an oil embargo,” Dombrovskis told the spends about $450mn each day importing Rus-
UK newspaper. “When we are imposing sanc- sian crude oil and refined products, along with a
tions, we need to do so in a way that maximises further $400mn for Russian gas and $25mn for
pressure on Russia while minimising collateral coal, according to Bruegel.
damage on ourselves” The European Commission proposed a ban
Exactly what shape these sanctions would on Russian coal earlier this month, but it is reluc-
take is unclear. But according to the Times, they tant to take such action against gas, as this would
could include a gradual phasing out of Russian leave the bloc vulnerable to energy shortages.
oil, or the introduction of a tariff on Russian Diplomats told Politico on April 22 that the
exports above a certain price cap. latest sanctions package was set to be presented
Europe is the largest market for Russian to EU countries this week. In addition to a form
oil, accounting for 60% of the country’s overall of ban on Russian oil imports, it is also expected
crude exports. Russia is also the EU’s largest to expel more Russian banks from the SWIFT
supplier, providing more than a total of the oil international payments system. ™

Week 17 26•April•2022 www. NEWSBASE .com P9