Embargo on Russian refined products will ‘further unbalance’ markets, says Kremlin

Kremlin spokesman Dmitry Peskov on May 9, 2022 in Moscow, during victory celebrations over Nazi Germany (AFP/Archives/Kirill KUDRYAVTSEV)

The European embargo on Russian refined petroleum products exported by sea, which is due to come into force on Sunday, is a “negative” measure that will “further unbalance” the markets, the Kremlin castigated on Friday.

“This will further unbalance international energy markets,” said Russian presidential spokesman Dmitry Peskov, assuring that Russia “was taking steps to cover (its) interests against emerging risks.”

Since early December, the EU has implemented an embargo on Russian crude transported by sea, coupled with a cap on the price of Russian oil at $ 60 a barrel, two ways, according to European policymakers, to limit the important resources from hydrocarbons.

In exchange, Moscow has since February 1 banned the sale of its oil to countries using this price cap.

According to the President of the European Commission, Ursula von der Leyen, present in kyiv on Thursday, this sanction costs “around 160 million euros per day” to Russia.

This embargo will extend from Sunday to the purchase of Russian refined petroleum products and the G7 countries will also cap the price of these products.

In fact, cargoes of kerosene, gasoline, bitumen, fuel oil or even diesel will no longer be able to enter the European area.

But despite a sharp decline for nearly a year, more than a quarter of Europe’s diesel imports still came from Russia in early 2023, according to global tanker tracking data analyzed by S&P Global.

This represents a daily volume of nearly 450,000 barrels, according to this company specializing in financial analysis and data.

According to several specialists in the oil market, the European embargo could thus lead to a rise in prices at the pump in Europe, because European countries will have to quickly find other sources of supply, in a market that is already under pressure.

Some countries, as well as the United Kingdom, have already started to turn to the United States in recent months, but also Saudi Arabia and the United Arab Emirates to anticipate this drop.

© 2023 AFP

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