Russia supplied significant volumes of crude oil and refined products to Europe for many years. Its primary crude oil export grade, medium-sour Urals (approximately 30 API and 1.7% sulfur), was a benchmark, both in quality and price, that European refiners long relied on to plan refinery processing configurations and that served as a signal for crude oil pricing dynamics in Northwest Europe and the Mediterranean. In addition to crude oil, Russia was a large supplier of gasoil (diesel) as well as a more limited supplier of other refined products such as fuel oil (including intermediate feedstocks) and naphtha. In today’s RBN blog, we review the abrupt reduction in Russian crude oil movements to Europe following Putin’s invasion of Ukraine 13 months ago with an eye on the specific grades that have filled the gap.
In Like a Rolling Stone, we reviewed the new destinations for displaced Russian barrels. In today’s follow-up, we will focus on crude oil and the various sources that have displaced Russian supplies. Before we dive deeper, it helps to take a quick look at the historical trends. As shown in Figure 1, Russian exports of crude oil and refined products bound for Europe averaged about 4.7 MMb/d in 2019 (stacked bar segments to far left) before declining to 3.8-4.2 MMb/d in the COVID years of 2020-21. Prior to the Ukraine war and resulting sanctions, Russian volumes accounted for 38% of total European imports of crude oil and refined products (12.4 MMb/d) and about 25% of all crude oil and refined products supplied to Europe (17.7 MMb/d) — the latter category including intra-European transfers (e.g., North Sea crude oil to the European continent). But by February 2023, total Russian volumes into Europe had declined by three-quarters to only 1.1 MMb/d, representing less than 10% of long-haul barrels supplied.
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