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Russian oil exports more resilient than

expected: IEA head

RUSSIA RUSSIAN oil exports have proved more resilient Birol also predicted that Russia would lose its
than expected over the past year, the head of the energy war with the West, with increased pur-
The IEA overestimated International Energy Agency (IEA), Fatih Birol, chases of oil by China and India failing to offset
the impact of Western told Reuters on January 19, despite some EU the lost shipments to Europe.
sanctions on Russian buyers cutting purchases and the bloc imposing “Europe is having major economic problems,
oil exports significantly, an embargo on the country’s seaborne oil vol- but for Russia, Europe was a very, very important
forecasting a year umes in early December. client,” Birol told CNBC.
ago that the global oil The IEA overestimated the impact of Western An independent analysis by the Centre for
market could lose as sanctions on Russian oil exports significantly, Research on Energy and Clean Air estimates
much as 3mn barrels forecasting a year ago that the global oil mar- that Russian fossil fuel export revenues col-
per day (bpd) as a ket could lose as much as 3mn barrels per day lapsed in December. The introduction of the ban
result of the restrictions. (bpd) as a result of the restrictions. In November, on seaborne imports and the price cap has cost
though, Russian oil exports reached their high- Moscow some $173mn per day, according to
est level since April, increasing by 270,000 bpd the analysis. Overall, Western measures caused
month on month to 8.1mn bpd. a 17% fall in Russia’s earnings from oil and gas
However, Birol added that Russian oil deliv- sales during the month.
eries abroad “are declining now, as forecasted, Prior to the war, Russia was “the number
and will decline further in the first quarter of this one energy exporter to the world,” Birol said.
year and beyond.” And it was the European market that gave it
The EU imposed an embargo on seaborne this status, as around three-quarters of the
Russian oil exports in early December and will country’s gas went there, along with 55% of its
shortly extend the restriction to the country’s oil exports.
petroleum product supplies as well. Russian “So, to find a client for gas and oil so easily
seaborne oil exports slumped to a two-year low to replace Europe will be extremely difficult,”
in December, down 14% m/m at 2.65mn bpd. he said. “I know that there are some countries
Not only did supplies fall to the EU, but also to in Asia, [such as] China and India, that are
China, India and Turkey, which have become benefiting from this situation, and they are
Moscow’s biggest oil buyers since the war in buying a lot of Russian oil, but I would be very
Ukraine began. careful to believe that those countries’ imports
The EU and the G7 have also introduced a will, both in volume terms and revenue terms,
$60 per barrel price cap on Russian oil. Mos- combine to [replace] what Europe was doing.”
cow has responded by stating in a December 28 “Russia will face major difficulties both for
decree that it will ban supplies to any countries oil and gas exports and, in my view, when we
that observe the cap from February 1, covering look at the next couple of squatters and years,
all stages of supply to the final buyer. Russia will lose the energy battle,” Birol said. ™

P10 www. NEWSBASE .com Week 04 26•January•2023