Sanctions may reduce Russian oil exports from Baltic ports by 20%

Exports of Russia's flagship crude oil Urals from Baltic Sea ports could drop by a fifth in December after Western prices and the EU embargo on Russian oil came into effect.

This was reported by Reuters.

Traders said Russia failed to fully redirect Urals exports from Europe to other markets, particularly India and China, and had difficulty finding enough ships to do so.

Urals exports from Baltic Sea ports are likely to fall to 5 million tons this month from 6 million tons in November, according to traders and Reuters calculations. According to some estimates, up to 4.7 million tons.

The European Union, G7 countries, and Australia imposed price caps on Russian oil at $60 a barrel from Dec. 5, in addition to an EU embargo on Russian oil imports by sea and similar commitments by the U.S., Canada, Japan, and Britain.

The restriction allows non-EU countries to import Russian oil by sea but prohibits shipping, insurance, and reinsurance companies from handling cargoes of Russian oil around the world unless it is sold at a price below $60.

In December, Urals crude was selling at deep discounts, and India, the dominant buyer, was buying barrels at well below $60.

The impact of sanctions on Urals shipments from Russia's Baltic ports has been amplified by a shortage of non-Western tonnage, a weak export economy, and moderate demand for this oil in Asia, especially China.

Pipeline monopoly Transneft has been unable to fill some of the available loading slots due to a lack of bids from producers, traders said. Some other slots have been postponed or canceled.

Author - Olena Madiak, 23/12/2022