Page 4 - AsianOil Week 16 2022

AsianOil COMMENTARY AsianOil

Asian buyers grapple with whether

to keep buying Russian oil

Asian buyers are faced with the dilemma of whether to continue buying Russian oil, which

is currently selling at a discount as Western sanctions against Russia remain in place

POLICY ALMOST two months after Moscow launched Imports up
its invasion of Ukraine, the war continues to Out of the 380 oil tankers that departed Russia
WHAT: cause ripples in the oil and gas markets. West- between February 24 and April 18, 115 were
Asian refiners are ern countries including the US, UK and Canada bound for Asia, according to a Nikkei Asia analy-
grappling with the have announced bans on Russian crude imports, sis of Refinitiv data that was published this week.
question of whether to with certain international oil companies (IOCs) The 380 tankers represent an increase on the
buy Russian crude in the doing the same. The European Union is scram- 357 that departed Russia over the same period
short term. bling to reduce its dependence on Russian oil of 2021.
and gas to the point of phasing it out altogether There were 52 tankers heading to China from
WHY: before the end of the decade. Russia, accounting for the majority of Asia-
Oil from Russia is These moves potentially put Asian buyers bound tankers over the latest period. At the
selling at a discount, of Russian crude in a difficult position as they same time, 28 tankers were headed to South
but some buyers are grapple with the dilemma of whether to keep Korea, 25 to India, nine to Japan and one to
cautious of being seen importing oil from Russia – currently being Malaysia. Nikkei Asia said this represented an
as undermining Western sold at discounted prices – or to express solidar- eightfold increase year on year in tankers from
sanctions. ity with the West. Russia to India and a 33% increase y/y in those
Certain Asian countries, including China from Russia to China, but a 16% y/y decline for
WHAT NEXT: and India, have sought to remain neutral, but the other countries.
The response across Asia others have been more critical of Russia. And India has cited national interest in continu-
is mixed but Russian buyers across the region – even those from neu- ing to buy Russian oil, with Moscow reportedly
crude will remain popular tral countries – have been cautious as they try to encouraging the purchases by offering crude
among certain buyers. avoid Western condemnation. At the same time, at a discount of up to $35 per barrel compared
though, the offer of cheap oil is proving hard to with pre-war prices. This comes as other sellers
resist as global crude benchmark prices remain of crude have put up price. For example, state-
above $100 per barrel while the price of Russia’s owned Saudi Aramco raised crude prices for all
Urals crude has fallen by around 30% between regions recently, with prices for oil being sold to
early March and mid-April to $78 per barrel. Asia hitting all-time highs. Earlier this month,

P4 www. NEWSBASE .com Week 16 22•April•2022