After the Russo-Ukrainian war, the West reportedly imposed various sanctions on Russia, including oil. European buyers are worried about the reputational risks of crude oil trading, so a tacit market is forming to mask the source of oil.
One reason to obscure the source of Russian oil is that European countries desperately need crude oil to keep their economies running and prevent further spikes in fuel prices, so companies and oil middlemen want to trade quietly.
According to TankerTrackers, exports in March have fallen to 1.3 million servings per day after the Russo-Ukrainian War. Oil exports from Russian ports to EU member states rose to an average of 1.6 million barrels per day in April, and these countries have historically been the largest buyers of Russian crude oil.
The United States, Britain, Canada and Australia have banned imports of Russian oil. But the EU relies on Russian energy, with 27 percent of its oil imported from Russia.
European leaders have debated for several rounds about whether to also impose an embargo, but have yet to act because they want to isolate Russia without inflicting pain on the European economy by raising energy prices.
Analysts and traders say the use of the unknown destination label indicates that oil is being shipped to larger vessels at sea and unloaded. Russian crude was then mixed with the cargo on board, obscuring its origins. Sanctioned countries such as Iran and Venezuela have also adopted this practice.
According to traders, new grade refined products known as Latvian mixtures and Turkmenistan mixtures are also available on the market, and it is understood that this crude oil, known as the Urals, contains a large amount of Russian oil at a price of $20 to $30 below the Brent benchmark. Before the Russo-Ukrainian War, it was usually aligned with the benchmark or below a dollar or two.
Much of Russia's oil is still marked with a clear destination on shipping documents. Barrels shipped to Romania, Estonia, Greece and Bulgaria more than doubled in April compared to the March average. The Netherlands and Finland, Europe's largest buyers, also saw a significant increase in trading volumes.
Giovanni Staunovo, a commodities analyst at UBS, said: "The EU's full sanctions on Russian oil are like saying you will cut your salary by 40% tomorrow, but you still have to live as if nothing happened." Russian oil has huge discounts on the market, which makes people feel very attractive. ”
No wonder the United States told India not to buy Russian oil, and India retorted that the amount it bought in a month was not as good as the amount of purchases in Europe in an afternoon.
Sure enough, he kept saying no, but his body was honest. With cheap oil, how can Europe not use it? Just for the sake of face, turn a blind eye to sea transactions.