Page 13 - FSUOGM Week 22 2022

FSUOGM NEWS IN BRIEF FSUOGM

($247) to UAH29,400 ($919) per thousand thirds of Russian oil supplies to the EU. strategy, with oil exports to be cut by 20-
cubic metres of gas. The new prices are too The remaining third comes through the 30% to 7-8mn barrels per day from the
high for the power plant to operate, said Druzhba pipeline, but Poland and Germany current 10-11mn bpd, RBC business portal
chairman of the Kharkiv TPP-5 Oleksandr are reportedly committed to phase out reported citing the co-owner and vice
Minkovych. Druzhba supplies by the end of the year. president of Russia’s second-largest crude
The prices come into play on June 1 and This would put EU oil cut at 90%, with the producer, independent Lukoil.
have caused concern for the future heating remaining 10% reserved for the exemptions “What is better: to sell 10 barrels of crude
season. Minkovych called on officials to given to Hungary, Slovakia and the Czech at $50, or seven barrels at $80?” Fedun
take action before the start of the colder Republic. asks, arguing that an equilibrium output
months. Hungary's government has opposed a of 7-8mn barrels would both satisfy the
Although fuel prices have surged sweeping oil embargo as the landlocked domestic and export demand and support
dramatically in Ukraine, the director country gets close to two-thirds of its oil the budget.
of the A-95 consulting group, Serhiy from Russia via pipeline, and the country's As the European Union prepares to
Kuyun, predicts that prices will decrease main refinery is technically reliant on cut 90% of Russian oil imports under the
as petroleum products gradually fill the Russian crude. sixth sanction package for Russia’s military
market. Russia is the European Union’s largest oil invasion of Ukraine, Fedun believes that
Prices for gasoline and diesel fuel supplier, providing the bloc with a quarter Russia has no interest any more to maintain
jumped by 30% between May 16-23, hitting of its oil and petroleum product imports in pre-invasion output levels given the 30-
UAH52-55 per litre and UAH58-60 per 2020, and as bne IntelliNews reported in a 40% discounts at which Russian crude is
litre respectively. Kuyun stated that the deep dive into Russia’s oil and other energy currently traded.
state-regulated fuel price of UAH40-45 per businesses, “sanctions by the numbers” (UN Instead of selling the oil cheaply in the
litre was fair for a stable, well-off market, voting, coal, oil, gas, grain), a ban on oil current unfavourable market environment,
although Ukraine is not currently in this exports could have a devastating impact on Fedun suggests storing the unexported oil
position. Russia’s budget revenues. for future consumption.
The US has already banned imports of In March 2022 Russia’s crude oil output
Russian crude, but the US is a net exporter stood at 1.51mn tonnes, or about 11.4mn
EU agrees to cut 90% of of oil and cutting off Russian supplies will bpd, with the 10.55mn bpd quota under the
OPEC+ international oil output agreement.
have little consequence for the US or Russia.
Russian oil, unplug Sber the EU has aleady disconnected from the As analysed by bne IntelliNews, in the short
As far as SWIFT is concerned, previously
term, Russia has no replacement for Europe
from SWIFT financial messaging system the sanctioned as the source of hydrocarbon demand.
VTB Bank, Russia's second-largest state-

The European Union leaders have agreed in controlled bank, Otkritie (restructured by
principle to cut 90% of Russian oil imports the central bank and primed for IPO prior
by the end of 2022, resolving the weeks-long to invasion), restructured state-controlled
stalemate over the sixth sanction package "military bank" Promsvyazbank, military-
for Russia’s military invasion of Ukraine. affiliated Novikombank, Bank Rossiya with
The new package will also include cutting links to Kremlin, the state development
off Russia’s biggest lender state-controlled bank VEB.RF, and private Sovcombank.
bank Sber (Sberbank) from SWIFT.
As followed by bne IntelliNews, the latest
EU oil ban proposal allows a temporary Senior Russian oil exec
exemption for pipeline supplies, the key
demand of Hungary which was blocking the urges lower output for
adoption of the sanction package.
According to European Council higher prices
President Charles Michel, there was an
agreement to immediately cut seaborne oil Senior Russian oil executive Leonid Fedun
imports from Russia, which account for two is arguing for a new national oil exports

Week 22 02•June•2022 www. NEWSBASE .com P13