Chennai, July 15 (UNI) With the embargo on imports of Russian oil by the European Union (EU) to kick in by the year end, the region has to look at other sources, mainly China, said UBS in a report citing an oil industry expert.
Global investment firm UBS had recently hosted a call with Jonathan Leitch, Director of EMEARC (Europe, Middle East, Africa, Russia and Caspian) Consulting at Turner Mason & Company.
The call was to discuss the short and longer-term outlook of the European refining mar- ket and focused on recent dis- ruptions on the supply side, impact from the upcoming capacity increase on global oil products’ balances and expected timing of margins’ normalisation, UBS said.
According to Leitch, the loss of Russian imports to the EU could exceed 700kb/d, and other sources are needed to fill the shortfall. As per the UBS report, Leitch is of the view that the direct impact of sanctions on the EU will be somewhat lim- ited because of blending and redirecting of Russian diesel and fuel oil exports.
This in turn will signifi- cantly complicate logistics and should push freight prices higher. There will be addition- al pressure from the ban on insuring Russian oil cargoes.Leitch was of the view that the potential price cap on Rus- sian oil is unworkable, said UBS.On importing oil from Asian countries like India and China, Leitch said the former had recently introduced ex- port limits and tax changes in order to ease domestic pressure of high prices.However, he expects an impact of less than 100kb/d on diesel export decrease from India in 2H22. On the other hand, China has high levels of spare capacity.
“While the country’s export quota has been recently in- creased, the expert does not believe that the country will materially raise exports as environmental concerns and retail fuel price caps
