The first Russian oil embargo did not cause any upheaval in the world market. What about the second?
After ceasing to import Russian crude oil at the beginning of December 2022, the European Union (EU), in conjunction with the G7 countries and Australia, is preparing, this Sunday February 5, to launch the second part of its plan, by prohibiting the import of refined Russian petroleum products, mainly diesel but also kerosene, heating oil or fuel oil.
This measure is particularly sensitive, as the Old Continent is so dependent on Russia for these products, and more specifically diesel. Despite the sharp drop in imports over the past year, Russian diesel still represents a quarter of imports of this fuel into Europe. Every day, the EU consumes some 6.4 million barrels of diesel, while its refineries produce only 5 million… The balance is possible thanks to imports, of which around 700,000 barrels come from Russia. The rest of the needs are covered by the Gulf States, the United States and India.
In parallel with the embargo, the Twenty-Seven have decided to set a ceiling price for these Russian products, as they had already done, at 60 dollars (about 56 euros) per barrel, for Russian crude oil. For “premium” fuels (diesel, kerosene, etc.), the price may not exceed $100 per barrel. For simpler products, such as fuel oil, the limit will be $45, “in order to weigh on Russia’s revenues, while maintaining a fluid global market for these products”, says a European diplomat. Concretely, Western countries prohibit service providers (transport, insurance, etc.) from transporting these Russian products beyond the fixed price.
Stocks and new sources
If the mechanism has been tested for two months for crude oil, the EU Member States nevertheless took the time to agree on Friday, February 3. The Baltic countries and Poland were indeed campaigning to further lower the ceiling on crude and refined products in order to further reduce Russian revenues, confides a diplomat from northern Europe. But now, the rest of the states, in the EU or the G7, did not intend to destabilize the market.
“In mid-Marchsays a source, after an overall analysis of the mechanism in place, a decision will be made on whether to modify the ceiling price level. » According to Russia, on the other hand, this decision “will further unbalance international energy markets”warned, Friday, the spokesman of the Russian presidency, Dmitry Peskov, assuring that Moscow “taking measures to cover [ses] interests ».
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