Skip to main content

Russia reduces crude oil exports to Europe and boosts trade ties with China 

posted onMay 4, 2018
nocomment

Russia, the world’s biggest energy producer has been selling less crude to Europe while pumping more oil to China, according to media reports. An analyst in Russia’s largest oil exporter Transneft  told Russia Today that Beijing has become a more preferable partner in the oil trade for Moscow while Bloomberg reported that Russia will have shipped 19 percent less oil through its ports on the Baltic and Black Seas in the first five months of 2018, and sold 43 percent more oil to China through March. 

“Given the current geopolitical conditions, the shift towards China from Europe is a protective measure. This shift in oil trade allows the Russian Federation to some extent to secure the oil industry from the sanctions of the West,” Anton Pokatovich, chief analyst of Binbank told RT.

The shift is likely to leave Europe’s refineries looking replacement for crudes, according to Alan Gelder, vice president for refining, chemicals and oil markets at Wood Mackenzie Ltd. in London.

“It’s almost like a crude shuffling,” Gelder told Bloomberg.  “The Middle East will have less medium-sour crudes going to Asia because of the growth in Russian volumes, so then they would push those barrels into Europe.” 

Russia is the largest seller of oil to both Europe and China. Chinese refiners are receiving increased volumes of Russian crude oil via inland pipes and seaborne shipments from the eastern ports of Kozmino, De-Kastri and Prigorodnoye. A second Sino-Russian oil pipeline began operations on January 1, 2018, doubling China’s capacity to import crude from the East Siberia-Pacific Ocean (ESPO) system to 30 million tons annually, or about 600,000 barrels a day, Xinhua News Agency reported.

Originating in the Russian town of Skovorodino, the new pipeline enters China at Mohe which borders Russia and terminates at Daqing in northeast  Heilongjiang Province. The first line from Mohe to Daqing was put into use on Jan. 1, 2011, with an annual capacity of 15 million tonnes. 

With the launch of oil futures in renminbi, both China and Russia have said they could reduce the use of the US dollar in oil trade.

ESPO pipeline

As Russia is aiming to increase its oil trade with Asia at Europe's expense, the lost Russian cargoes are being felt in tanker markets.

“The tanker sector is getting hit in every region,”  Jon Chappell, a shipping analyst at Evercore ISI told Bloomberg. “If Russia were to have more and more cargoes going to pipelines instead of ports, then as the industry starts to recover it may be a segment that’s weighed down by the fundamental shift in demand.” 

Expansion of the Russia-China pipeline will also hit Aframaxes employment in 2018, Rajesh Verma Lead Analyst at Drewry Shipping Consultants said. Aframax is an oil tanker smaller that 120.000 mt deadweight.

line black 1300
line black 1300

SPRING ESCAPE IDEAS

By Newsroom

Kyoto is the iconic tourist spot of Japan and its best season is spring in April. All over the city clouds of beautiful cherry blossoms bloom and draw visitors from every corner of Japan and the world; every evening the trees are lit and give a truly enchanting display.  
 

By Newsroom

Sorrento, perched picturesquely on a plateau above the sea with spectacular views over the Bay of Naples, has been a popular tourist destination for almost two centuries. This beautiful seaside community makes a great base for visiting the Amalfi Coast, Capri and Pompeii. 

By Newsroom

April isn’t actually spring in Argentina — it’s fall. Which happens to be harvest season for the hundreds of vineyards that call Mendoza home. Every March through May, the region attracts more than 70,000 wine lovers to witness the gathering of the grapes in one of Argentina’s most prolific winemaking zones. 

By Newsroom

Maramures is probably the most wonderful hidden secret of Romania. Like walking into a fairy tale or stepping back into medieval Europe.  Maramures has the most UNESCO monuments in the country. But besides the monuments, you’ll love the welcoming people, scenery and gastronomy. 
 

By Newsroom

Madagascar, a huge island nation off the southeast coast of Africa, is home to thousands of animal species – like lemurs – found nowhere else, plus rainforests, beaches and reefs. Miles and miles of stunning coastline wrap around the island.  Turtles visit the beaches, dolphins and whales appear in its waters revelling in the crystal clear water of this wonderland. 

By Newsroom

With over 14 miles of idyllic beaches, a range of modern resorts and accommodations, excellent shopping, dining and nightlife, Cancun is one of Mexico`s most popular destinations and one which keeps visitors coming back again and again.

By Newsroom

The most popular island holiday destination in the Indonesian archipelago is home to an ancient culture that's known for its warm hospitality.Exotic temples and palaces set against stunning natural backdrops 

01.

Kyoto, Japan: The cherry blossoms create one of the most spectacular spring sights in the city

02.

Sorrento,Italy: Cobblestone streets, small, rocky beaches and picture-perfect views of Mount Vesuvius and Naples 

03.

Mendoza, Argentina: Loved for its tree-lined streets, sunny days, Malbec wine and restaurants and spas

04.

Maramures, Romania: Widely regarded as the country's most traditional region

05.

Madagascar, Africa: One of the most jaw-dropping and fascinating wildlife hotspots

06.

Cancun, Mexico: Surrounded by clear Caribbean waters it has much more to offer than its party-town reputation might suggest.

07.

Bali, Indonesia: Stunning beaches, scenic rice paddies and deep sense of spirituality draw millions of foreign visitors