Page 5 - AsianOil Week 09 2022

AsianOil COMMENTARY AsianOil

and European Union members. Some Asian What next?
countries were also involved in the initial Against this backdrop of increased uncertainty
sanctions. over how easy it will be to continue buying Rus-
Those initial sanctions targeted Russia’s econ- sian oil over the coming weeks, Asian refiners
omy but not oil supplies or energy payments. are increasingly eager to resume crude imports
Indeed, the US was quick to note that energy from Iran.
payments would not be affected by restriction Asia is traditionally a major buyer of Ira-
on Russia’s access to the SWIFT payment sys- nian oil, but most refiners in the region halted
tem. However, given that an invasion of Ukraine crude purchases from Iran in 2019 after former
had been considered unlikely by many analysts US president Donald Trump withdrew from
right up until it happened, it also now cannot be the 2015 nuclear deal with the Middle Eastern
ruled out that tougher sanctions may be brought country and reimposed sanctions against its oil
in at a later date, which do target energy pay- exports.
ments and flows. The conflict in Ukraine has added to momen-
S&P Global Platts cited feedstock managers tum behind talks to restore the Iranian nuclear
at major South Korean, Indian and Japanese deal, and there have been expectations that it
refineries as saying purchasing Far East Rus- could be signed in the coming days. At the same
sian sweet crudes, including Sokol, ESPO and time, though, there are mixed reports emerging
Sakhalin Blend, may become more challenging over how challenging the final hurdles are that
going forward. And some companies may opt would need to be cleared before the deal can be
to take a stance on no longer buying Russian oil, finalised.
for both commercial and political reasons, if the Several refiners from South Korea, Japan and Analysts have
situation in Ukraine worsens and further sanc- India have recently signalled their willingness
tions on Russia are introduced. to resume importing Iranian crude as soon as also highlighted
On the other hand, analysts have also high- a new nuclear deal is reached. And China has the potential for
lighted the potential for Russia to pivot more continued to import some Iranian oil, with the
towards Asian refiners as buyers in Europe step US opting not to enforce sanctions against the Russia to pivot
up efforts to diversify their sources of crude Chinese companies involved as talks between
supply. In Rystad Energy’s oil market note this Washington and Tehran have progressed. more towards
week, the consultancy noted that European There is considerable uncertainty about what
refineries were attempting to “reshuffle” pur- the coming weeks will bring, but Asian refin- Asian refiners.
chases of Urals crude for other comparable ers could find themselves benefiting from how
medium sour grades, including Saudi Arabian things are playing out elsewhere in the world.™
and Iraqi oil.
The consultancy said that if Europe rejects NewsBase’s sister publication bne IntelliNews is
Urals crude, which is now trading at a discount following the war in Ukraine and its fall out with
to Brent, then there would still be buyers for it. daily reports with correspondents across the entire
It added that Asian refiners in particular would Emerging Europe region, including in both Russia
have the opportunity to buy the rejected barrels and Ukraine. Or sign up to Editor’s Picks here, a
and capitalise on the discount. The New York free daily email digest of the most important sto-
Times also flagged up efforts by Russian compa- ries in the last 24 hours. At the moment Editor’s
nies to sell their crude to refiners in China and Picks is almost entirely dedicated to following the
elsewhere in Asia. conflict in Ukraine.

Week 09 04•March•2022 www. NEWSBASE .com P5