London: The The European Union Given Europe’s complex distribution network and challenges in tracking crude after it has been mixed or refined, a phased ban of Russian oil has been proposed but could be difficult to implement.
The plan, if agreed to by the member states, will be effective in six months for crude oil and eight months for diesel and other oil products.
How unquestionable would any EU sanctions be?
Under the proposal, Hungary and Slovakia A longer period will be given – until the end of 2023 – to adapt to the ban. This means EU countries will still be able to buy Russian oil through Hungary and Slovakia until a plan is ratified to prevent both countries from buying more oil than they need.
Can Russia’s oil run out in Europe even after sanctions?
European countries may still continue to purchase Russian cargo from other third countries without being aware of its origin.
The origin of the oil can usually be traced back to its chemical composition, such as sulfur content and density. However, according to industry sources, some buyers have been duped in the past by forged documents, hiding the origin of cargo from countries under sanctions including Iran and Venezuela.
This becomes more difficult if the crude is mixed with other crudes for refiners, and becomes nearly impossible once processed into standard products such as gasoline, diesel or jet fuel.
Who wants to phase out or stop Russian oil purchases?
According to Jaypee, at least 26 major European refiners and trading companies have suspended spot purchases or intend to eliminate a combined 2.1 million barrels per day (bpd) of Russian imports. morgan,
including European companies oysters, TotalEnergies, Repsol and BP no longer buy any refined products with Russian ingredients. And BP’s contracts state that any deal with a seller that violates its policy will be void, as detailed in the Platts trading window.
According to documents seen by Reuters, several shipping firms are also seeking guarantees that the cargo has no Russian origin or interest, and has not been transferred from a ship with Russian ties.
Why is it so difficult to locate cargo of Russian oil?
Even with all those documents in place, there is no guarantee any traces of Russian hydrocarbons will be eliminated when it enters the Amsterdam-Rotterdam-Antwerp (ARA) complex, the main oil import hub of the European Union. It is made up of eight ports spread across two countries, 96 terminals owned by hundreds of international oil companies, and 6,300 storage tanks.
“Some products processed at European refineries will continue to contain Russian oil,” Shell says. “At the same time, many products such as diesel are typically mixed – meaning that the proportion of mixed fluids in the pipes and tanks that feed the entire industry may have originated in Russia.”
In the ARA, mixed Russian oil may appear in customs data as fuel only from the Netherlands. Kunit KazokogluHead of Oil Demand Analysis at FGE.
“I think a lot of European countries will cite imports from the ‘Netherlands’ to hide the origin of Russian products,” Kazokoglu said.
Where does the oil go from the saw?
The fuel can be re-exported to other regions and countries. It can go by barge to other terminals within the same port, or go down Rhine River for Switzerland, France and Germany. Traders said it could hide the origin of the fuel.
From the ARA hub, oil products can be delivered via NATO’s Central European Pipeline System (CEPS) to six sea ports and 11 refineries, three rail and 16 truck-loading stations, and six international airports across the continent. hooks up.
“If it is not a Russian owner, apart from the certificate of origin – but even that can be changed – it is difficult for the (storage) terminal to identify the origin of the products,” it said. krien van beckyA broker at ODIN-RVB Tank Storage Solutions in Rotterdam.
What are companies doing to deliver on their promises?
Industry sources said buyers are requesting a breakdown on the origin of the blended oil from storage sites to take their decision on whether they can accept it. But a fully traceable original document is not always readily available in a reasonable time frame before a deal takes place.
Some shipping charters provide a certificate of where the fuel was produced or processed. While a country’s customs authority will have access to that data with imported cargo, the documents are considered confidential.
Shell previously classified goods of Russian origin as containing 50% or more of the fuel produced in Russia. But the firm recently tightened its restrictions on buying Russian oil, saying it would no longer accept products refined with Russian ingredients, including mixed fuels, in accordance with its trading contracts.
However, the ban only applies to platforms where companies are allowed to insert their own clauses, and Gasoil will pull out the contract on the major ICE exchange, a source familiar with the matter said.
However, Shell chief executive Ben van Burden said there is no system in the world to trace the origin of Russian molecules in refined products.
“Diesel coming out of an Indian refinery fed with Russian crude is considered Indian diesel,” he said.
Some other traders continue to evaluate whether a diesel blend, for example, containing 49% Russian diesel, would count as a non-Russian product, three trading sources told Reuters.
The plan, if agreed to by the member states, will be effective in six months for crude oil and eight months for diesel and other oil products.
How unquestionable would any EU sanctions be?
Under the proposal, Hungary and Slovakia A longer period will be given – until the end of 2023 – to adapt to the ban. This means EU countries will still be able to buy Russian oil through Hungary and Slovakia until a plan is ratified to prevent both countries from buying more oil than they need.
Can Russia’s oil run out in Europe even after sanctions?
European countries may still continue to purchase Russian cargo from other third countries without being aware of its origin.
The origin of the oil can usually be traced back to its chemical composition, such as sulfur content and density. However, according to industry sources, some buyers have been duped in the past by forged documents, hiding the origin of cargo from countries under sanctions including Iran and Venezuela.
This becomes more difficult if the crude is mixed with other crudes for refiners, and becomes nearly impossible once processed into standard products such as gasoline, diesel or jet fuel.
Who wants to phase out or stop Russian oil purchases?
According to Jaypee, at least 26 major European refiners and trading companies have suspended spot purchases or intend to eliminate a combined 2.1 million barrels per day (bpd) of Russian imports. morgan,
including European companies oysters, TotalEnergies, Repsol and BP no longer buy any refined products with Russian ingredients. And BP’s contracts state that any deal with a seller that violates its policy will be void, as detailed in the Platts trading window.
According to documents seen by Reuters, several shipping firms are also seeking guarantees that the cargo has no Russian origin or interest, and has not been transferred from a ship with Russian ties.
Why is it so difficult to locate cargo of Russian oil?
Even with all those documents in place, there is no guarantee any traces of Russian hydrocarbons will be eliminated when it enters the Amsterdam-Rotterdam-Antwerp (ARA) complex, the main oil import hub of the European Union. It is made up of eight ports spread across two countries, 96 terminals owned by hundreds of international oil companies, and 6,300 storage tanks.
“Some products processed at European refineries will continue to contain Russian oil,” Shell says. “At the same time, many products such as diesel are typically mixed – meaning that the proportion of mixed fluids in the pipes and tanks that feed the entire industry may have originated in Russia.”
In the ARA, mixed Russian oil may appear in customs data as fuel only from the Netherlands. Kunit KazokogluHead of Oil Demand Analysis at FGE.
“I think a lot of European countries will cite imports from the ‘Netherlands’ to hide the origin of Russian products,” Kazokoglu said.
Where does the oil go from the saw?
The fuel can be re-exported to other regions and countries. It can go by barge to other terminals within the same port, or go down Rhine River for Switzerland, France and Germany. Traders said it could hide the origin of the fuel.
From the ARA hub, oil products can be delivered via NATO’s Central European Pipeline System (CEPS) to six sea ports and 11 refineries, three rail and 16 truck-loading stations, and six international airports across the continent. hooks up.
“If it is not a Russian owner, apart from the certificate of origin – but even that can be changed – it is difficult for the (storage) terminal to identify the origin of the products,” it said. krien van beckyA broker at ODIN-RVB Tank Storage Solutions in Rotterdam.
What are companies doing to deliver on their promises?
Industry sources said buyers are requesting a breakdown on the origin of the blended oil from storage sites to take their decision on whether they can accept it. But a fully traceable original document is not always readily available in a reasonable time frame before a deal takes place.
Some shipping charters provide a certificate of where the fuel was produced or processed. While a country’s customs authority will have access to that data with imported cargo, the documents are considered confidential.
Shell previously classified goods of Russian origin as containing 50% or more of the fuel produced in Russia. But the firm recently tightened its restrictions on buying Russian oil, saying it would no longer accept products refined with Russian ingredients, including mixed fuels, in accordance with its trading contracts.
However, the ban only applies to platforms where companies are allowed to insert their own clauses, and Gasoil will pull out the contract on the major ICE exchange, a source familiar with the matter said.
However, Shell chief executive Ben van Burden said there is no system in the world to trace the origin of Russian molecules in refined products.
“Diesel coming out of an Indian refinery fed with Russian crude is considered Indian diesel,” he said.
Some other traders continue to evaluate whether a diesel blend, for example, containing 49% Russian diesel, would count as a non-Russian product, three trading sources told Reuters.