Northern Europe has already slashed Russian oil imports by 90%, 2 weeks before the EU ban kicks in
- Russia's crude shipments to Northern Europe fell 92% in the four weeks to November 18, compared to February.
- That's a huge departure from 2021, when Germany, the Netherlands, and Poland were the top European importers of Russian oil.
Even so, importers have already begun reducing their dependence on Russian energy supply — its key market Northern Europe has already slashed seaborne Russian oil imports by over 90%, according to Bloomberg analysis based on vessel tracking data.
Russia exported just 95,000 barrels of crude oil a day to Rotterdam in Netherlands, in the four weeks to November 18. That's down 92% from about 1.2 million barrels a day in early February — before Russia invaded Ukraine – according to Bloomberg. The major Dutch trading port was Russia's only crude-oil delivery destination in Northern Europe for a ninth consecutive week, per Bloomberg.
This is significant, because the Northern European nations of Germany, the Netherlands and Poland were the top European importers of Russian oil in 2021.
While pipeline crude from Russia to EU is exempt from the December 5 ban, it made up just about one-third of all Russian crude oil exports to the EU last year. The EU was Russia's single largest energy market.
The slump in seaborne crude deliveries to Northern Europe sent Russia's total seaborne exports down to a nine-week low of 2.67 million barrels a day in the week to November 18, per Bloomberg.
This hit Moscow's war chest, as oil revenues from crude-export duty fell to a weekly average of $127 million — its lowest level since February, according to Bloomberg.
Russia looks to peddle unsold oil to Asia
Russia is likely to see 1.1 million barrels of unsold crude a day after EU's import ban kicks in, the International Energy Agency said last Tuesday.
To make up for the deficit, Russia is exporting significantly more crude to Asia, including to India and China. In October, Russia surpassed Saudi Arabia and Iraq to become India's top oil supplier. Russian crude imports to China have also soared 22% on-year in September.
US Treasury Secretary Janet Yellen told Reuters on November 11 she wasn't too worried about India and China's purchases of Russian crude, because the G7 is set to introduce a price cap for Russian oil. This is also expected to come into force on December 5.
The G7 is counting on the price cap to hit at Russia's oil revenues, even if demand for the fuel persists.
Russia, though, appears to be defiant about the G7 price cap. Alexander Novak, the country's deputy prime minister, said on Monday it will not sell oil to those who impose the measure on its exports, Interfax reported on Monday.
Instead, it will sell its products to "market-oriented partners" or reduce its oil production, said Novak, according to the news agency.
US benchmark West Texas Intermediate settled 0.44% lower at $79.73 a barrel on Monday while international benchmark Brent futures were 0.54% higher at $87.92 a barrel at 12.46 a.m. EST on Tuesday.
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