BAKU, Azerbaijan, Aug.3. Global oil supply is growing, but growth will remain constrained by several factors, Trend reports with reference to Fitch Solutions.
“Data on Russian production is lacking and there is little consensus as to its current export levels. However, the steep discount of Urals to Brent is testament to the difficulties its faces in securing adequate offtake for its supplies, with exports now heavily reliant on China and India.
Exports will come under additional pressure as the EU’s import ban (which prohibits purchases of seaborne Russian crude) comes into effect this December. According to tanker tracking data from Bloomberg, the bloc is currently importing almost 1mn b/d from Russia by sea, volumes that will need to find alternative homes by the end of the year,” reads a report from Fitch Solutions.
The company says the EU appears increasingly reluctant to impose greater constraints on the country’s oil exports, at the risk of further inflaming the ongoing cost-of-living crisis.
“It recently rowed back on its attempt to curb third-party trade with Moscow, softening restrictions on deals with Russian SOEs. The UK, meanwhile, has yet to impose a proposed worldwide ban on maritime insurance covering Russian vessels, instead restricting the ban to domestic importers. If a worldwide ban were to be imposed, trade frictions would increase, raising the cost and complexity of executing deals with Russia and likely hampering export volumes.”
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