Europe cannot completely end its dependence on Russian oil
Since the European ban on petroleum products from Russia took effect on February 5, they have turned to look for other suppliers. European demand is huge. The International Energy Agency (IEA) indicated in its report published in November 2022 that Europe would have to seek 1 million barrels of fuel oil and naphtha per day from sources other than Russia to compensate. make up for the lack of oil.
While the US and Saudi Arabia are Europe’s main suppliers, India has emerged as an essential source of diesel and kerosene. Both fuels are produced with oil from the Urals, a mountainous region in the territory of Russia.
One of the two companies producing diesel and kerosene that India exports to the EU is the Reliance group, which has two refineries with a capacity of 1.8 million bpd. During the first week of February, the two plants received 650,000 barrels of Russian oil per day, equivalent to a third of their production capacity.
The second is the Italy-Russia joint venture Nayara Energy, whose refinery is close to Reliance’s site in Jamnagar, western India. The plant has a production capacity of 405,000 barrels of oil per day, of which 109,000 comes from Russia’s Urals.
Neither Reliance nor Nayara bought Russian oil prior to the conflict with Ukraine. However, Western sanctions changed the situation. Under selling pressure, Moscow reduced the price to India by $32-35 for Urals oil. Thus, Russia has risen to the top position of supplier to the South Asian giant while New Delhi often buys “black gold” from Iraq (Iraq), Saudi Arabia and the United Arab Emirates (UAE). ) before the conflict.
Typically, refineries cannot change the source of the oil they process overnight. This requires technical adjustments that can be complicated. Jay Maroo, an analyst at analytics firm Vortexa, explains the characteristics of Urals oil are not very different from Iraqi oil. Reliance’s refineries are among the most modern in the world, so they can switch from one substance to another without too much difficulty.
The amount of Russian oil arriving in Jamnagar is a testament to this flexibility: Vortexa statistics show that the region increased its imports of this oil from zero to 440,000 bpd between February and December 2022.
The price cuts introduced by Russia, combined with the sanctions, have made the production of petroleum products very profitable for India. According to data from India’s Ministry of Commerce, the country’s exports of diesel, gasoline and kerosene increased by 80% and reached $52 billion in the period April-November 2022 compared to the same period in 2021. equivalent to 17% of India’s exports during the same period. As for oil going to the EU, the value of exports from India increased by 82% to more than $8 billion.
As a result, New Delhi has imposed duties on exports of oil refineries since July 2022. This increases tax revenue, while preventing domestic manufacturers from prioritizing serving foreign customers and at the expense of domestic demand. According to Indian Federal Tax Minister Sanjay Malhotra, the levy is expected to bring in 250 billion rupees ($2.9 billion) to India in the fiscal year 2022-2023 (ending March 31, 2023). .
Diesel and kerosene from the Reliance and Nayara plants are not banned in the EU, despite containing some Russian petroleum.
at Thuvienpc.com – Source: Baotintuc.vn – Read the original article here