Page 6 - FSUOGM Week 16 2022

FSUOGM PIPELINES & TRANSPORT FSUOGM

Oil traders said to brace for EU’s Russian

May 15 sanction deadline

RUSSIA MAJOR global commodity trading houses are rather insignificant US oil imports embargo.
planning to reduce crude oil and oil products This week one of the world’s largest independ-
Trading houses have from Russia's state-controlled oil companies as ent oil traders, Geneva-based Vitol Group, said it
until the middle of the early as May 15 to comply with the deadline of intends to completely stop trading Russian crude
month to imply with the European Union sanctions on Russia, Reu- oil and oil products by the end of this year.
sanctions on Russia. ters reported citing unnamed sources. Another major trader, Trafigura, told Reuters
While the EU did not follow the US in impos- it "will comply in full with all applicable sanc-
ing an oil imports embargo on Russia, the word- tions. We anticipate our traded volumes will
ing of the EU sanctions exempts oil purchases be further reduced from 15 May." Gunvor and
from state-controlled Rosneft or Gazpromneft Glencore declined to comment.
only if "strictly necessary". Reportedly, the trad- Rosneft and Gazpromneft European supply
ers are playing it safe and are planning to signif- volumes accounted for 29mn barrels, or almost
icantly cut purchases from Rosneft to comply 1mn barrels per day (bpd) in April 2022, which
with the ambiguous sanctions language, sources is over 40% of overall Urals crude oil exports
told Reuters. from Russia's western ports in April, according
As followed by bne IntelliNews, exports of to Reuters.
Russian oil and gas are the next big target in pos- "All companies are sitting down with their
sible sanctions for Russian military invasion of lawyers to figure out what they can and cannot
Ukraine. The country is expected to cash in as do," a senior unnamed trading source told Reu-
much as $320bn of oil and gas exports this year, ters. "It's unclear what this means for the whole
but latest budget reports show that the govern- supply chain, for shippers, insurers," adding that
ment is already falling behind on hydrocarbon his firm was looking at implications for non-
revenues. state-owned oil sales.
In the meantime, some oil traders are doing "Lawyers are having a feast on this. Where
everything they can to avoid doing business with there is uncertainty, companies will step back.
Russia, even though Russian oil exports have Russian oil flows will be greatly reduced going
largely not been sanctioned yet, apart from the forward," the source added. ™

P6 www. NEWSBASE .com Week 16 21•April•2022