Russia Loses 60% of Its Seaborne Crude Market in Europe

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Russia has lost three-fifths of its seaborne crude sales in Europe since Moscow sent troops into Ukraine in February. That market is going to vanish almost completely eight weeks from now and the latest sanctions will make it very difficult to divert flows elsewhere. Writes Bloomberg.

Crude shipments to Europe averaged 630,000 barrels a day in the four weeks to Oct. 7, down from 1.62 million before the invasion. Tankers carrying Russia’s oil are now forced to spend four times as long making each delivery to India as they would previously have done shipping a cargo to the Netherlands, or 10 times as long as it would have taken to get to Gdansk in Poland.

As the European Union’s latest swath of sanctions take hold in eight weeks’ time, the European market will essentially completely vanish for the Kremlin. The forthcoming penalties, implemented in response to Moscow’s war campaign on Ukraine, ban any Russian crude oil from being transported on EU tankers. Bringing crude to India, for example, will take roughly ten times as long as before due to the sanctions.

The move will make it exceedingly difficult for Russia to move crude to other buyers. The European sanctions have also been further ratified to include a key provision championed by the US, which imposes a price cap on Russian crude. Under the revised sanctions, Russian crude oil can be transported on EU tankers, but only if the barrels are priced below a specific ceiling from Dec. 5.

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