Page 131 - RusRPTJan23

Russian oil over the same period, compared to 65.7mn tonnes in the same period a year earlier.
India, China and Turkey increased their exports of Russian crude oil by 1.2mn barrels during the summer per day, practically compensating for the reduction in supplies from Russia to Europe.
However, by December 5, when the European embargo comes into force, Moscow had to redirect about 1.1mn barrels more. to other destinations, writes the Oil & Gas Journal.
Nevertheless, the Russian authorities are unlikely to agree to reduce oil production, as it is both costly and not so easy - it is necessary to mothball the wells, says Pavel Verevkin, an investment strategist at Alor Broker. As a last resort, during overproduction, oil can be stored in reserve storage facilities, which can be built additionally, he admits.
The majority of European nations have already abandoned seaborne deliveries of Russian oil but Italy and Bulgaria scaled them up before the embargo, according to Argus data. Seaborne supplies of Russian oil to the EU plummeted twofold from 1.6mn barrels daily in January to 0.77mn barrels per day in October. Meanwhile, deliveries to Italy surged twofold to 338,000 barrels per day and to Bulgaria by almost four-fold to 146,000 barrels daily, Vice President of Argus for Consulting in CIS Region Sergey Agibalov said in his presentation.
The cost of seaborne transportation of Russian oil in anticipation of the EU decision on price ceilings is rising sharply: freight rates for delivery from the Baltic Sea to India after December 5, for example, are discussed at $15mn (or $20 per barrel) - compared with previous rates in the range of $9–11.5mn.
In October, the European Union approved a rule according to which any
foreign tanker that has ever transported Russian oil at a price above the
marginal price must be excluded from European services for insurance,
financing, etc.
However, the United States then asked its European colleagues to soften this
approach. As a result, the EU authorities have significantly revised this rule:
European providers will be prohibited from providing services to ships only if
they have intentionally violated the price ceiling, this ban will be valid for 90
days after the shipment of oil at a price above the ceiling, and, finally, during
this period it will not be possible to provide services only for the transportation
of Russian raw materials (and, for example, the ban will not apply to oil from
Saudi Arabia).
131 RUSSIA Country Report January 2023 www.intellinews.com