A Jan. 10 Wall Street Journal article took note of the fact that world energy flows are shifting dramatically, as a result of the sanctions being applied against Russia. They quote lead oil analyst with Vienna-based Kpler, Viktor Katona saying: “The rerouting of Arctic grades is absolutely taking place.... Russia’s Arctic grades were among the Europe-oriented streams that since Dec. 5 have to find new homes elsewhere, and in all of those cases, it’s pretty much an India and China split.”
The Journal explains: “Western sanctions on Russian energy resources are triggering a shift in global oil and gas flows and disrupting long-standing economic ties around the world.” They quote the head of research at oil consulting company Energy Aspects, Amrita Sen: “Even if prices were to rise to $100 a barrel, China and India can continue buying Russian oil if they have access to their own insurance.”
Bloomberg, for its part, writes that Beijing has begun purchases of three types of Arctic crude previously destined for the EU. “Some traders believe the development illustrates a rerouting of Russian supplies internationally, as well as China’s shift away from Middle Eastern imports of oil such as Iraqi grade Basrah Heavy.”
Kommersant meanwhile reported that Russia’s oil output was up 2% in 2022, but that “experts warn that Russian oil output may drop in January-February amid the price cap imposed by the EU and the United States on its crude and petroleum products…. Russia is likely to find alternative channels for its oil exports, but it will take time to secure those, said Maxim Malkov at Kept.”
