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Lost Russian oil revenue bodes well for shippers, refiners | – #Lost #Russian #oil #revenue #bodes #shippers #refiners

LONDON, Feb 8 (Reuters) – Western sanctions against Russia have significantly reduced the country’s oil revenues, costing some tens of billions of dollars. Russia directed to shipping and processing companies related to

At least 20 trade and bank according to the source, most of the winners from the sanctions are China, India, Greece and United Arab Emirates. A handful partially Russia owned by companies.

Sources told Reuters that none of the companies are in violation of sanctions, but they are Russia to reduce the company’s revenues, which President Vladimir Putin calls a war machine European Union and USA benefited from the measures prepared by

Ukraine In the second year of the conflict, estimates show that Russia’s revenues have declined, but exports have remained relatively stable despite sanctions.

Putin He said that sanctions against the West will lead to an increase in energy prices. Instead, the international benchmark Brent oil prices it fell from $139 to an all-time high of $80 in March 2022, weeks after the start of the war.

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Before Moscow’s aggression against Ukraine began on February 24 last year, a barrel of Brent oil was 65-85 dollars was sold around

Russia’s finance ministry said that Moscow’s oil export revenues will fall after the Group of Seven (G7) industrialized nations imposed a price cap on Russian oil in December. january decreased by 40% year-on-year.

“The low official price of oil means that Russia’s state budget has suffered in recent weeks,” said Sergey Vakulenko, a non-resident fellow at the Carnegie Endowment for International Peace.

Vakulenko was the former head of strategy at the Russian energy company Gazprom Neft. A few days after the start of the war, he left the firm and Russia.

Customs according to statistics, some of the benefit was captured by oil refineries in India and China, but the main beneficiaries should be oil shippers, middlemen and Russian oil companies,” he added.

Sanctions against Russia – probably the most severe sanctions ever imposed on individual states – USA and include direct bans on the purchase of Russian energy by the EU, as well as bans on the transportation of Russian crude oil anywhere in the world. 60 dollars/ barrel.

For example, steep discounts to buyers in Russia, China and India, for example, against competing products from the Middle East offer and diverted most of the raw and refined products to Asia.

The shipping ban and price cap have made buyers wary and forced Russia to pay to ship crude because it doesn’t have enough tankers to carry all its exports.

At least those involved in operations 10 According to the invoice seen by the trader and Reuters, january By the end of May, Russian oil companies were offering buyers in India and China 15-15 per barrel of crude oil.20 dollars discount offer was doing All the sources asked not to be named due to the sensitivity of the matter.

Besides, 10 According to the trader and invoice, Russian sellers pay shipping companies 15- per barrel to transport crude oil from Russia to China or India.20 they paid dollars.

As a result, according to the Russian Ministry of Finance, Russian companies received only $49.48 per barrel of Urals oil at Russian ports in January, which is 42% year-on-year and Europe The price of Brent oil has fallen by only 60%.

By comparison, a US exporter of Mars crude – similar to the Urals – would pay around $5-7 per barrel to ship to India. Assuming a discount of $1.6 per barrel to US WTI crude, the US exporter would collect about $66 per barrel at the US port, or 90% of the benchmark price.

Daily in 2022 10With production of .7 million barrels and exports of 7.0 million barrels of crude oil and refined products, the discount and additional costs will reduce producer revenues by tens of billions of dollars in 2023.

Head of the International Energy Agency (IEA), Fatih Birol, said on Sunday that the price limit is not only january Moscow’s income in the month of 8 billion dollar decreased.

However, since some of the lost revenue is captured by Russian firms, it is difficult to put an exact hit on the profits of producers and the state.

As an added complication, some Russian crudes, including Pacific grade ESPO, are also more valuable than Urals.

Russia’s energy and finance ministries declined to comment on the impact.

‘CRAZY GOOD’ SHIPPING BONANZA

According to experts, including Vakulenko and Russian oil traders, the low returns have coincided with high profits for some intermediaries.

After decades of low profits or losses, parts of the global shipping industry are enjoying a financial boom from shipping Russian oil.

These companies include Russian state-owned shipper Sovcomflot, led by Putin ally Sergei Frank, and Greece’s TMS Tankers Management, Stealth Maritime, Kyklades Maritime, Dynacom, Delta Tankers, NGM Energy and New Shipping.

Some Greek and Norwegian tanker owners have sold their old vessels to shipping firms such as Fractal Shipping with their owners in Dubai at record prices.

Saudi Arabia and the UAE have refused to condemn Russia’s war in Ukraine and have expanded cooperation with Moscow despite pressure from Washington.

All shipping companies have declined to comment on any revenue from Russian oil.

An invoice seen by Reuters shows a shipper charged a Russian crude trader about $10.5 million for a voyage to take a regular-size Aframax tanker with 700,000 barrels on board from a Baltic port to an Indian refinery in January.

A year ago, a similar trip would have cost a seller of Russian oil between $0.5 and $1.0 million, depending on shipping costs.

The cost of such a trip to a shipper in today’s market ranges from $0.5 to $1.0 million, which means the shipper’s net profit from one trip can be $10 million.

One Russian crude oil trader called the tanker business “crazy good.”

While tanker owners have demanded record high rates for transporting Russian crude oil, refiners in India and China have also benefited from big discounts.

India’s Russian oil imports have hit an all-time high of more than 1.25 million barrels per day in recent weeks, meaning the country has saved more than $500 million a month in oil debt with Russian oil selling at a discount of about $15 a barrel.

India’s leading importers – IOC, HPCL, BPCL, Nayara and Reliance – declined to comment on discounts and profits.

Nayara is 49% owned by Rosneft, the Russian state oil company controlled by Putin ally Igor Sechin, meaning that part of the revenue is indirectly captured by Russia. Rosneft declined to comment on its role in Nayara and how it might recoup some of the profits.

China imported more than 1.8 million barrels per day of Russian oil from April 2022 to January 2023, said Emma Li, a China analyst at Vortexa Analytics.

Based on an estimated $10-a-barrel discount for both ESPO and Urals crude on a supply basis, that would give Chinese refiners about 5.5 over 10 months, according to Reuters estimates. billion saved dollars.

Independent refineries in eastern Shandong Province were the biggest beneficiaries. State-run refining giant Sinopec Corp also benefited from cheap oil, and state-owned Petrochina, Zhenhua Oil and CNOOC profited from barrel trading, traders said.

All companies, as well as the Shandong provincial government, did not respond to a request for comment.

Added by Arathy Somasekhar and Muya Xu report; Written by Dmitry Zhdannikov; Edited by Mike Collett-White and Barbara Lewis

Our standards: Thomson Reuters Trust Principles.

2023-02-08 05:59:59
Source – reuters

Translation“24 HOURS”



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