“Sanctions could cut Russia’s oil exports to the Baltic Sea by 20%.”
This month, exports from Baltic Sea ports to the Urals are likely to drop to about 5 million metric tonnes.
After a Western price cap and an EU ban on Russian oil went into effect, traders and Reuters did some math and found that exports of Russia’s Urals crude blend from Baltic Sea ports could drop by up to 20% in December.
Traders said that Russia hasn’t been able to move all of its Urals exports from Europe to other markets, like India and China, because it hasn’t been able to find enough ships that are the right size.
Based on information from traders and calculations made by Reuters, Urals exports from Baltic Sea ports are likely to drop from 6 million metric tonnes in November to around 5 million metric tonnes this month. Some estimates say that there are only 4.7 million metric tonnes.
Starting on December 5, the European Union, G7 countries, and Australia put a cap on the price of Russian oil at $60 per barrel. This is in addition to the EU’s ban on importing Russian crude by sea and similar pledges by the US, Canada, Japan, and Britain.
Related: As Russia’s sanctions get closer, people think that there will be less oil on the market.
Non-EU countries can still import Russian crude oil by sea, but shipping, insurance, and reinsurance companies can’t handle cargoes of Russian crude anywhere in the world unless it sells for less than $60 per barrel.
Urals crude has been sold at bigger discounts in December, and India, which is the main buyer, has bought barrels at prices well below the $60 price cap.
The effect of the sanctions on Urals loadings from Russia’s Baltic ports has been made worse by a lack of non-Western tonnage, a weak export economy, and low demand for the grade in Asia, especially China.
Pipeline monopoly Traders say that Transneft didn’t fill all of the available loading slots because producers didn’t put in enough bids. Some of the others were moved or scrapped.