BAKU, Azerbaijan, April 14. A collective supply response could offset up to a 4 mb/d potential disruption in Russian supplies by year end, but this is very difficult and severe near-term pressures persist, Trend reports with reference to Oxford Institute for Energy Studies (OIES).
“Analysis suggests that replacement crude could fill the gap of up to 4 mb/d by December 2022, with severe near-term pressures persisting between April and October 2022. This comes on the back of US/IEA’s decision to release 240 mbbls from SPR between May and October 2022 to try and offset this near-term pressure. The effectiveness of this move remains subject to the magnitude/duration of the supply shock and the impact on price is expected to be short-lived,” OIES said in its latest report.
In March total oil exports from Russia fell by 10 percent m/m, with products accounting for the entire fall (-25 percent) and crude loadings remaining unchanged from the month before. Russian crude exports in March remained largely unchanged as Russian crude was redirected to Asia (mainly India and China) with loadings rising m/m by 39 percent or 0.54 mb/d, while Europe shun Russian crude imports by 23 percent or 0.7 mb/d.
“Cutbacks were more profound in product exports that declined m/m by 25 percent as some products such as FO were hit by direct sanctions (e.g., from the US), while the lack of international buyers and spare storage amid falling domestic demand has prompted refiners to cut runs. As Russian crude flows to Asia are offsetting reduced intake elsewhere, there is a high risk of Russian production being hit first by refinery cuts on reduced offtake of products,” the report reads.
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