But many in the oil industry are concerned that supply tightness will make a comeback when the European Union ban on Russian crude imports comes into effect in December, and a similar measure on refined products in February 2023.Start your day with a roundup of B.C.-focused news and opinion delivered straight to your inbox at 7 a.m., Monday to Friday.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc.
Europe currently gets around 2 million barrels per day of crude and about 1 million bpd of products from Russia. There are several risk factors that are currently unknown, chief among them is whether Russian President Vladimir Putin will meekly accept a price cap on much of his country’ crude and product exports, or whether he will simply shut in production and see if that will cripple Western economies and weaken their resolve.
For argument’s sake let’s assume a Brent price of $80 by December when the ban comes into effect, and a price cap for Russian crude of $60.At that sort of discount it’s likely that countries in Asia, such as China and India, as well as smaller crude importers in Africa, such as South Africa, will be interested in buying the 2 million bpd of Russian crude no longer going to Europe.
A senior official, speaking off the record at the APPEC event, said that if traders and refiners were making some money out of circumventing the price cap, that wasn’t really a problem.