Russia's war on Ukraine has reshaped the global oil market, with suppliers from Africa stepping in to meet European demand, while Moscow, reeling under Western sanctions, is increasingly seeking to take advantage of dangerous ship-to-ship transfers to deliver crude to Asia.

This shift in trajectories represents the biggest change on the supply side in the global market for trading crude oil since the American shale oil revolution changed the shape of the market about 10 years ago, and also indicates that Russia will be able to circumvent an oil embargo that the European Union may impose on it if the countries continue Asia - especially China - to buy its raw materials.

Russian shipments at big discounts

The sanctions imposed on Moscow after the start of the war in Ukraine last February - which includes a US ban on imports - prompted Russia to move away from Europe and go to buyers in India and China who receive shipments at deep discounts, according to data from the oil sector and traders.

According to data from the Paris-based International Energy Agency, Russian exports returned last April to pre-war levels on Ukraine, and oil prices stabilized near the level of $110 a barrel, after hitting a 14-year high of $139 a barrel in March. Past.


Analysts say that even if the European Union agreed to an oil embargo in the next round of its sanctions against Russia, Asian demand could offset the impact of that embargo.

"We don't expect the supply gap to widen or prices to rise unless the West applies diplomatic pressure on Asian buyers," said Norbert Rucker of the Julius Baer Group.

The complex and intertwined set of sanctions imposed on Moscow by the United States, Britain and the European Union has prevented Russian-owned or flagged ships from entering ports, meaning that some of Asia's increased trade is done by ship-to-ship transfers at sea, an expensive and involved process. On the risks of raw leakage.

Overall, Russian oil flows to Asia by sea have jumped at least 50 percent since the start of the year, according to tanker-tracking company Petro-Logistics and other data.

Ship-to-ship transfer of cargo, which represents a small percentage of the volume of maritime trade, was diverted from the Danish coast to the Mediterranean to avoid sanctions and objections.

Mark Gerber, head of "Petro-Logistics" told Reuters that the quantities of Russian crude and oil products that are transported from one ship to another in the Mediterranean are estimated at 400,000 barrels per day, most of which go to Asia.

In January, before the Russian war, about 1.5 million barrels per day went directly to Asia.

Seaborne shipments are just a part of Russia's total exports, and total Russian exports of crude and its products - including those transported via pipelines - have risen to just over 8 million barrels per day, according to International Energy Agency data.


What about West African crude?

In order to compensate for Russian crude, European refineries switched to importing raw materials from West Africa, and these imports increased by 17% last April, compared to the average for the period from 2018 to 2021, according to Petro-Logistics data.

Eikon data shows that 660,000 barrels per day - mostly from Nigeria, Angola and Cameroon - arrive in northeastern Europe this May, including 3 shipments of Nigerian Aminam crude compared to one shipment last February.

Meanwhile, Gerber says that shipments of West African crudes to India almost halved, as 280,000 barrels per day were shipped last April, down from 510 thousand barrels per day last March, with New Delhi switching to Russian crude.

With the surge in European demand, traders say the prices of Nigeria's light, low-sulfur crudes in particular have risen to record levels.

Supplies from North Africa to Europe have increased by 30% since last March, according to "Petro-Logistics", and the United States has increased its supplies to Europe.

Data indicate that European crude imports from the United States in May rose by more than 15% compared to last March, which is the highest recorded monthly rise.

Europe dumped about 1.45 million barrels per day of crude from the United States.


Opportunities at Russia's expense

For its part, The Washington Post said that the Russian-Ukrainian war has affected many policies around the world, but the most important thing that affects it is global energy policies. On the one hand, anti-Russian countries seek to replace their imports of Russian energy to achieve more pressure. Putin must stop the war, and on the other hand, many countries with high energy production are trying to take advantage of this opportunity at Russia's expense.

What happened is a sudden global realignment of energy markets triggered by a sudden shift by Russia, which has spent decades trying to use its oil reserves, Daniel Yergin, an energy historian and vice-chairman of the board of directors at Standard & Poor's, was quoted as saying by the newspaper. and gas for integration into the global economy.

And the newspaper added in a report at the end of last April that other oil and gas exporters who were not previously at the forefront of global energy talks - such as Angola, Nigeria and Congo - are also beginning to emerge as potential players for the future of Europe, as European countries that are rushing to break their dependence on Russian gas are heading to The most reliable LNG providers, such as Qatar and the United States.

But the newspaper warned that the coming months will be a terrifying time for Europe, as the effects of high prices spread all over the world and governments struggle to operate their factories, heat their homes and keep power plants running, and there are not enough alternatives in the near term to avoid great economic suffering in the coming winter if Russia halted supplies.

The newspaper believes that instead of buying oil and natural gas from Russia - where production costs are very low and transportation by pipelines is cheap - Europe has to turn in the short term to more expensive alternatives such as the United States, which did not have until 7 years ago facilities to export gas Absolutely.

According to the newspaper, European companies must add $1.50 per thousand cubic feet - that is, between 30 to 50% of the cost of the gas itself - to get a LNG tanker to make the journey from the Gulf of Mexico to Europe.

The newspaper describes the scene that European countries are also moving to diversify their supplies, but energy producers cannot keep up, indicating that the rapid transformation project that provides new supplies of natural gas usually takes at least two to four years.