An Embargo Will Bruise Russia’s Oil Industry

The recent uptick in production occurred as Russian refineries increased their output after regular maintenance, and as buyers lost some of their wariness of handling Russian oil.

“Buyers have grown accustomed to dealing with Russian cargoes,” said Viktor Katona, an analyst at Kpler.

Russian exports to the European Union by sea, for instance, fell by about 440,000 barrels a day from February to March, but have since held relatively steady at around 1.2 million barrels a day. Italy has been a large buyer, taking about 400,000 barrels a day, although about a quarter of that oil is shipped to Central Europe through Trieste.

Kpler estimates that an average of about 600,000 barrels a day of oil flowed by pipeline from Russia in May to countries like Hungary, Slovakia, Poland and Germany.

The Hungarian oil company, MOL, said earlier this month that its profits from refining were “skyrocketing” because of the discount on Russian Urals crude. The Hungarian government has lobbied against sanctions on Russian oil, arguing that as a landlocked country it has little choice but to rely on piped shipments from Russia.

Article source: https://www.nytimes.com/2022/05/30/business/oil-embargo-russia.html