(Finance and Economics) How much does the EU's "partial oil ban" hurt Russia?
China News Agency, Beijing, June 1 (Liu Wenwen) It has been more than 50 days since the last round of EU sanctions against Russia.
After weeks of discussions and consultations, the European Union recently pushed for a sixth round of sanctions against Russia, reaching an agreement on a partial ban on Russian oil.
The EU's "partial oil ban" will hurt Russia?
According to foreign media reports, Europe is the largest buyer of Russian energy, and its purchases account for half of Russia's oil exports.
Lin Boqiang, dean of the China Energy Policy Research Institute at Xiamen University, told China News Agency that the "partial oil ban" had a great impact on Russia, forcing Russia to change the flow of oil trade from the European Union to some countries in East Asia and Africa.
Data show that since February 24, India has received 34 million barrels of discounted Russian oil.
Among them, more than 24 million barrels were delivered in May, much higher than 7.2 million barrels in April and 3 million barrels in March, and 25 times the average monthly delivery last year (960,000 barrels).
But even if India buys Russian oil aggressively, experts say it will be "a drop in the bucket".
As for Africa, longer shipping routes mean higher costs.
"As a commodity, the trade of oil requires infrastructure cooperation, either by ship or by pipeline. Therefore, it is not easy for Russia to switch markets." Lin Boqiang said.
Chen Shuxian, chief analyst of the petrochemical industry of Cinda Securities, also pointed out that based on the long-term decentralized crude oil import structure, and the construction of infrastructure such as pipelines, ports, terminals, ships, etc., as well as financing payment methods, high transportation costs and other issues, It is difficult for Asia to undertake all the crude oil transferred from European crude oil, and the impact of the conflict on the production and export of Russian crude oil will gradually appear.
“For Russia, the oilfield production process requires continuous capital investment, otherwise the production capacity will fail. Now the oil majors are withdrawing from the Russian market and are prohibited from further investment in Russia. With the withdrawal of foreign capital, Russia’s upstream capital expenditure will be If there is a further decline, it may face the dilemma of a sharp decline in domestic oil fields and a decline in production." Chen Shuxian further said.
The European Union will agree to a ban on insurance for ships carrying Russian oil, officials and diplomats with knowledge of the matter said.
Foreign media said that the "insurance ban" will be a double blow to Russia together with the oil embargo.
As European companies insure most of the world's oil trade, sanctions banning insurance would also hinder Russian exports to buyers in Asia and elsewhere.
Chen Shuxian believes that shipping is the most important way for Russia to export crude oil and petroleum products, but shipping involves multiple links, one is the transportation of ships, and the other is the issuance of letters of credit by banks and insurance policies issued by insurance companies. Sanctions Impact.
If the European Union bans insurance for ships carrying Russian oil, it will limit Russia's global oil trade by sea to some extent.
According to a previous report released by the Russian Ministry of Economic Development, Russian oil production in 2022 is expected to fall by 9.3% from the previous year to 475.3 million tons.
The decline in Russian crude oil production, superimposed on the EU's "partial embargo" on Russian crude oil, will greatly reduce the supply of Russian crude oil.
The "partial oil ban" not only hurts Russia, but also the world.
Fatih Birol, executive director of the International Energy Agency, pointed out that Russia is the cornerstone of the global energy system. The conflict between Russia and Ukraine and the sanctions imposed by Western countries on Russia have caused the world to face a triple crisis of oil, natural gas and electricity at the same time.
"It's going to be bigger and longer than the oil crisis of the 1970s," Birol said.
At present, it is still unclear whether OPEC+ will increase production, and the global crude oil supply gap has increased.
Lin Boqiang believes that, considering that it is not easy for Russia to switch its export market, oil prices will run at a high level for a long time.
Liu Jing, a researcher at Huajin Securities, pointed out that the current "energy crisis" in Europe and the high global inflation driven by high oil prices may cause the future investment policy of the energy industry to change from energy sustainability to energy security and affordability, thereby promoting global oil and gas. Upstream capital spending in the industry increased.
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