![]() ![]() Potential derogations also exist for shipping services that are necessary for humanitarian purposes, civil society activities that promote democracy, human rights or the rule of law in Russia and "ensuring critical energy supplies and infrastructure." On this basis, the EU has exempted the transport by vessels to Japan of crude commingled with condensate, originating in the Sakhalin-2 Project in Russia until June 5, 2023. Brussels can grant exemptions for the transport of certain crude and oil products to third countries. It remains unclear also how disputes over pricing and cargo origination would be resolved.įurther uncertainty lurks in the EU's potential exemptions from shipping restrictions contained in its updated eighth sanctions package, which includes a provision to enforce the G7 price cap. 2023, if Russia holds its nose and sells into the price cap or overcomes the logistical hurdles from bans on Western shipping services."īut insurance and shipping service companies still want to know when the sales price for a Russian cargo would be recorded and how the price would be verified. "Thereafter, volumes could bounce back faster than our forecast for 90,000 b/d of growth between Mar. "The adjustment could buy a little time, but we still forecast the need to re-route about 2.5 million b/d of banned EU crude and product imports by Q1 to cause a supply drop of 1.1 million b/d between Oct 2022 and Feb 2023," Paul Sheldon, chief geopolitical adviser at S&P Global, said. 19 gives oil markets some wiggle room to get used to the new measures. Allowing Russian crude to be unloaded before Jan. 31 that any Russian-origin cargo loaded before Dec. Known unknownsĪ number of uncertainties over the timing and implementation of the cap continue to trouble shipping markets and maritime insurers. We do assume that the use of non-western shipping insurance and services will be used to move a good chunk of Russian crude."Īs Moscow struggles to redirect all its displaced oil, S&P Global expects Russian production shut-in as a result of the new export hurdles to peak at 1.5 million b/d in the first quarter of 2023 but would ease as more sanction workarounds are found. ![]() "But the initial impact of the cap will likely be muted as Russia will not want to participate in trade with countries using the price cap. "There is still a lot of uncertainty.the price cap level has still not been set," said Shin Kim, head of oil and gas supply analytics at S&P Global Commodity Insights. Combined, the three buyers have seen their seaborne imports of Russian crude almost treble from pre-war levels to over 2 million b/d, accounting for nearly 70% of Russia's seaborne flows.īut the availability of an unregulated or 'shadow' tanker fleet to redirect flows and local refining slate constraints are limiting factors. Many expect refiners in China, India, and Turkey -the top current destinations for Russian crude- to absorb more of the affected oil. Russia has made it clear it has no intention of selling its oil under the price caps, meaning it will need to develop alternative supply chains to bypass the measures or shut-in its displaced oil. The price level, widely expected to be around $60/b for Russian crude, is a key factor in how Russia responds to the cap and a marker for the potential profits from circumventing the rules. ![]() 4, the group reiterated a month-old pledge to finalize the measure in the 'coming weeks'. More than four months in the making, G7 nations have yet to set the maximum price at which shippers from G7 and EU countries may legally transport Russian crude and products. Receive daily email alerts, subscriber notes & personalize your experience.īut global oil markets remain in the dark over how the US-led attempt to slash Russia's oil revenues will play out even as the deadline for the G7 price cap and an EU ban on imports approaches on Dec. ![]()
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