Russian Crude Oil, Who Is Still Buying It and Who Stopped

With the Russian invasion of Ukraine who is still buying Russian Crude Oil and who stopped? Australia, Britain, Canada and the United States have imposed total bans on Russian oil purchases, The 27-member EU bloc is divided over whether to impose a ban that can affect about 27% of its imports and with oil prices soaring concern is for how to accommodate refineries that are landlocked and almost completely dependent on Russian crude supplies via pipelines.

Russian Oil Fun Facts

  • Russia’s oil exports 7.2 million barrels per day and ranks as the world’s largest oil exporter.
  • Russia is the world’s third largest oil producer behind the United States and Saudi Arabia. In January 2022, Russia’s total oil production was 11.3 mb/d, of which 10 mb/d was crude oil, 960 kb/d condensates and 340 kb/d NGLs.
  • By comparison, US total oil production was 17.6 mb/d while Saudi Arabia produced 12 mb/d. 
  • Russia is the world’s largest exporter of oil to global markets and the second largest crude oil exporter behind Saudi Arabia. In December 2021, it exported 7.8 mb/d, of which crude and condensate accounted for 5 mb/d, or 64%.
  • Oil product exports totalled 2.85 mb/d, of which 1.1 mb/d of gasoil, 650 kb/d of fuel oil and 500 kb/d of naphtha and 280 kb/d of vacuum gas oil (VGO). Gasoline, LPG, jet fuel and petroleum coke made up the remaining 350 kb/d. 
  • Russia produces mainly from eastern Siberia, the Yamal region and Tatarstan.
  • Russia consumes about 3.45 million barrels a day
  • Crude oil and other petroleum products shipped primarily through pipelines but also by tankers.
  • In the year ending in October, Russia supplied about a quarter of all oil imported by the European Union, three times as much as the next-largest importer.
  • Russia sold 1.6 million barrels of crude oil a day to China last year, making it the largest single buyer of Russian crude.
  • Russia was China’s second-largest crude oil supplier in 2021, accounting for about 15 percent of China’s total imports and behind only Saudi Arabia.
  • Roughly 745,000 barrels of crude oil was delivered per day to Central and Eastern European nations, including Hungary, Romania, the Czech Republic, Slovakia, Belarus and Bulgaria.
  • Belarus got 95 percent of its oil imports from Russia.
  • Hungary got 74 percent and Lithuania 61 percent.

Countries that have refused to criticize Russia for its invasion, such China and India, continue to buy Russian crude. India relies on Russia for military supplies, has called for a ceasefire but has stopped short of condemning the invasion. China is Russia’s largest trading partner for over a decade, has also yet to condemn the attack.

Turkey also has no plans to stop buying Russian oil and is seeking to mediate between Kyiv and Moscow,

Even without direct sanctions Russia will lose around 1 million barrels per day (bpd) in oil exports, according to analyst Jarand Rystad, head of Rystad Energy, from the 10.5 million bpd it sold last year.

The major buyers of Russian crude oil

Europe

The European refineries that continue to buy Russian crude are largely co-owned by Russian firms or depend on pipeline supplies from Russia.

Russian Owned

  • NEFTOCHIM BURGAS. Bulgarian refinery, owned by Russia’s Lukoil, Russian crude accounts for60% of its total intake, continuing to refine Russian crude.
  • MIRO. Germany’s largest refinery, Miro, which is 24% owned by Rosneft.  Russian crude continues to account for about 14% of the intake
  • PCK SCHWEDT Germany’s refinery, 54% owned by Rosneft receives crude oil via the Druzhba pipeline.
  • ISAB Italy’s largest refinery, owned by Lukoil-controlled Swiss-based Litasco SA, processes Russian and non-Russian crudes.
  • ZEELAND REFINERY The Dutch refinery, 45%-owned by Lukoil, declined to comment on whether it was using Russian crude oil.

Land locked Refineries

  • LEUNA The land-locked Leuna refinery in eastern Germany, majority-owned by TotalEnergies is ed Russian crude by the Druzhba pipeline.

Other European Refineries

  • HELLENIC PETROLEUM Greece’s biggest oil refiner is relying on Russian crude for about 15% of its intake. The company earlier this month secured additional supplies from Saudi Arabia. 
  • MOL The Hungarian oil group, which operates three refineries in Hungary, Slovakia and Croatia, continues to be supplied by the Druzhba pipeline. Hungary is opposed to sanctions on Russian oil and gas.
  • PKN Orlen Poland’s largest refiner continues to buy Russian crude for its refineries in Lithuania, Poland and the Czech Republic but preparing for a complete halt. Lithuania has said it planned to stop using Russian oil and gas.
  • ROTTERDAM REFINERY Exxon Mobil declined to comment on whether its Dutch refinery in Rotterdam was using Russian crude oil.

India

  • HINDUSTAN PETROLEUM India’s state refiner bought 2 million barrels of Russian Urals for May loading, according to trading sources last week. 
  • INDIAN OIL India’s top refiner has bought 3 million barrels of Urals for May delivery, trade sources said.

Russian crude and oil product exports, Jan 2020-Dec 2021

Last updated 24 Feb 2022

Who stopped Buying Russian Oil?

  • Germany has suspended the controversial Nord Stream 2 gas pipeline from Russia.
  • Switzerland’s oil trading giant Trafigura stated that it was “reviewing options” over its Vostok minority stake.
  • BP British oil major, which is abandoning its stake in Rosneft, will not enter new deals with Russian entities for loading at Russian ports, unless “essential for ensuring security of supplies”. 
  • ENI 30.3% owned by the Italian government, is suspending purchases of Russian oil. No Russian crude will be used at Germany’s Bayernoil refinery, in which Eni and Rosneft have stakes. 
  • EQUINOR Norway’s majority state-owned energy firm has stopped trading Russian oil as it winds down its operations in the country. 
  • GALP The Portuguese oil and gas company has suspended all new purchases of petroleum products from Russia or Russian companies.
  • NESTE The Finnish refiner has Russian oil contracts until the end of the year but is not making any new supply agreements. Neste says it has “mostly replaced” Russian crude with alternatives such as North Sea oil.
  • PREEM Sweden’s largest refiner, owned by Saudi billionaire Mohammed Hussein al-Amoudi, has “paused” new orders of Russian crude, which accounted for around 7% of its purchases, replacing them with North Sea barrels.
  • Nynas Sweden’s bitumen product manufacturer Nynas says it will end purchases of Russian raw materials altogether.
  • REPSOL The Spanish company has stopped buying Russian crude oil in the spot market.
  • SHELL The world’s largest petroleum trader will stop buying Russian crude and phase out its involvement in all Russian hydrocarbons.
  • TOTALENERGIES The French company has stopped buying oil from Russia, although one of its land-locked refineries in Germany continues to receive Russian crude by pipeline. 
  • VARO ENERGY The Swiss refiner, which owns 51.4% in Germany’s Bayernoil refinery, said it did not plan to enter into new deals to buy Russian crude.

Source: Reuters IEA

From The TradersCommunity US Research Desk