The crude oil market adapts quickly to new sanctions to the Russian shadow tanker fleet, even by creating short and medium -term winners and losers.
Short -term winners are Middle Eastern oil exporters, who have seen the demand for their rise in crude oil as a refinent in India and China looking for alternatives for Russian cargo.
Tanker owners also benefit from a higher level for ships that are not part of sanctions imposed by the United States and other Western countries on Russian rough exports.
On the other hand of the ledger, Indian and Chinese Penitami are the losers, with their cost to rise when they replace Russian crude oil with a more expensive alternative.
The cash price of the Middle East Benchmark Dubai Crude ended at $ 81.25 per barrel on Tuesday, the premium $ 3.63 for Brent Futures BRN1!.
Dubai is usually traded with a discount to Brent, but has had a premium of more than $ 3 per barrel since the administration that came out of former US President Joe Biden announced new steps that were hard to Russia, including sanctions for tankers who operate as part of what is called Moscow, called Moscow, called Moscow, called Moscow’s Shadow fleet.
Indians reportedly struggled to get a source of Russian cargo for March delivery, with Anuj Jain, the head of the best finance oil, said during the revenue call on Tuesday that the company expects a lower arrival than Russia.
India is the largest buyer of Russian crude oil, taking 1.71 million barrels per day (BPD) in 2024, or almost 40% of its total imports, according to LSEG Oil research data.
China is the second largest buyer of Russian crude oil, taking 1.09 million BPD from the sea market and up to 1 million BPD from the pipeline network in 2024, according to LSEG.
India took mainly the Russian Ural class, which was exported from the port in Europe, while China bought Espo crude oil, which was sent from the Far East Russia.
The possibility of India faces more difficulties in continuing trade with Russia, considering that tankers that contain in Russian European ports must pass through waters controlled by countries that impose sanctions.
Shorter sea trips from the far East Russia to China will make it easier for China to continue to buy eSPO crude oil, although the availability of ships will be a major short -term challenge.
The short -term impact of new sanctions on Russian rough exports so far is clear, elevators with the price of Middle Eastern crude oil are relative to other values, and extortion with the price of tankers and availability.
Risk imports
Long -term implications are unclear.
First, the possibility of Russian oil traders will once again find ways to overcome sanctions and keep crude oil flowing, even if they have to cut prices and cut margin to do it.
But the biggest impact may be good that both China and India replied to the import of crude oil in the coming months.
China, the largest oil importer in the world, has a track record of reducing imports if the refiners assume that prices have risen too high, or too fast.
They can do this considering sufficient stock, and the soft condition of fuel consumption today in the midst of warm economic growth.
Independent Chinese refiners can also choose to be unemployed if access to crude oil is cheaper than Russia is limited.
Many of these drainagers also face higher costs to use alternatives, such as fuel oil, after Beijing cuts discounts for consumption tax paid for imports of raw materials.
This situation is more complex for Indian refiners, given their smaller inventory, but they may be tempted to cut the processing level if they cannot get enough crude oil sources at competitive prices.
Purification margin is under pressure from the surge in the price of new oil, which has not been fully reflected in the price of the product given the soft condition of demand for fuel such as gasoline and diesel in many Asian countries.
Purification margin to process Dubai crude oil barrel on a typical Singapore refinery (dub-sin-res) ends at $ 1.53 per barrel on Tuesday, up from low loss of 3 cents on January 21, but still far below average 365 days moving $ 4.46.
Source: Reuters
