Page 7 - FSUOGM Week 05 2023

FSUOGM COMMENTARY FSUOGM

y/y gain in 3Q22. At the same time in 4Q22 the to Bulgaria, which received relief from the
Urals discount to Brent widened to 29%. embargo.”
“Moreover, in the fourth quarter, the growth Russia's oil exports were also affected by the
of world prices for gas and coal slowed down, ceiling on Russian oil prices effective December
while prices for many metals decreased. In 5. The G7 countries, the EU and Australia intro-
addition, the embargo and the EU price ceil- duced it at $60/bbl.
ing on Russian oil limited the physical volume Companies from the participating states
of exports. The EU ban on the import of coal, a of this initiative are prohibited from providing
number of iron and steel products from Russia, services for the transportation of Russian oil by
as well as other restrictions, continued to con- sea to third countries, as well as services for its
strain exports,” the CBR said. insurance, brokerage, technical assistance and
financing of operations.
Oil At the same time, the restrictions do not
According to Eurostat, the decline in the phys- apply if oil is bought at a price not higher than the
ical volume of supplies of oil and petroleum established ceiling. These restrictions in Decem-
products from Russia to the EU accelerated to ber slowed down the reorientation of supplies
30% y/y in October (3Q22: -23% y/y). Its vol- from Russia to Asian countries. At the same
ume fell to 2.3mn bpd in October, i.e. by 1.0mn time, the effect of the EU restrictions in Decem-
bpd y/y, including 0.7mn bpd y/y due to oil. ber could have been overestimated, as one-time
“The worsening dynamics in the fourth quar- short-term factors were also in play.
ter [are] due to the EU embargo. The ban on oil
imports to the EU from Russia was introduced Gas
as early as the sixth round of sanctions in June. In 4Q22 the decline in the physical volume
At the same time, until December 5, it did not of Russian gas exports to non-CIS countries
apply to oil supplies under contracts concluded intensified, rising to 64% y/y against a 3Q22
before June 4 and under one-time transactions slump of 61% y/y.
with a short-term supply,” the CBR said. “After The absence of gas supplies to the EU through
December 5, 2022, embargo exemptions are pro- the Nord Stream 1 pipeline, which ceased at
vided for a much smaller volume of shipments. the end of August, was fully manifested in the
As a result, in December, offshore oil supplies results. At the same time, in 4Q22, gas was still
from Russia to Northern Europe ceased, and to exported to Europe through Ukraine and via the
Southern Europe fell to 0.2mn bpd. At the end TurkStream pipeline, so there was some reve-
of the year, such deliveries remained mainly nues coming in from gas exports to Europe.

Week 05 01•February•2023 www. NEWSBASE .com P7