EU sanctions and huge US profits

These days, some sources of information¹ The report stated that Russia plans to reduce its oil exports from western ports by 25% in March compared to February.

The action will be taken to try to raise oil prices. Moscow had announced earlier that it would cut its oil production by 500,000 barrels per day for the month of March after imposing restrictions on EU imports on February 5. This would have been equal to 5% of its production or 0.5% of global oil production. If confirmed, these latest plans to cut supplies by up to 25% would see up to 625,000 barrels per day removed from Russian oil exports.

In December 2022, the European Union had already set the price of Russian oil at $60 per barrel before lowering it again to $45 per barrel a few days earlier. Since December 5, the European Union, as well as the United States and Great Britain, have agreed to ban member states from buying, importing or transporting Russian oil except for limited quantities exported overland to Hungary, Slovakia and the Czech Republic through Drogba (The pipeline supplying Poland, Germany, Hungary, the Czech Republic and Slovakia, ed.).

The $60 per barrel cap is intended to significantly reduce Kremlin revenue and thus fund the war in Ukraine.

the ban from the European Union On purchases of Russian petroleum products ed price limits Really complicated Russian market? We can certainly say that the oil price ceiling succeeded in reducing Russian revenues, but without hindering Russian supplies globally, causing a significant rise in the price.

It seems that Moscow is not facing much difficulty in redirecting its crude oil previously destined for Europe to other countries such as China, India and Turkey. Since the beginning of the conflict and the loss of the market with Europe, Moscow has been acting Big discounts on petroleum products by entering into agreements with China and India in particular, to become the largest buyers of Russian oil.

In India, for example, Russian oil imports reached a record 27% of the total or 1.4 million barrels per day in January, which is an increase of 9.2% compared to December 2022.

However, in the United States, crude oil production will increase in 2022. According toEnergy Information Administration (EIA), crude oil production was at its highest in August 2022 at 11.87 million barrels per day. Nearly three-quarters of this production was obtained from oil shale deposits in the region less 48.

In 2019, Russia represented the second largest exporter of crude oil with 45% of the revenues of the 2021 budget, and before the start of the conflict in Ukraine, Europe imported from Moscow 4 million barrels per day, equivalent to 34% of total imports.

Certainly Russian profits have fallen dramatically though center agricultural research e environment CREA estimates that Moscow’s income is still around $688.3 million a day. The EU’s ban on Russian seaborne crude oil imports and G7 price caps have cost Russia an estimated $171.8 million per day. Western measures contributed to a decline in Russian oil and gas export revenues by 17% in December 2022. Despite this, Europe became the largest importer of Russian oil in December 2022, which indicates that despite the sanctions and statements, European countries may not be. Able to operate without massive imports of crude oil from Moscow.

Russia also exports through African markets, and there has been a significant increase in Russian oil exports to that continent over the past year. Last December, Moscow sent 214,000 barrels per day of petroleum products to Africa (especially Tunisia, Morocco and Nigeria), almost three times more than in December 2021, and this number is likely to increase after the latest embargo by the European Union.

In all of this, theMajor oil companies record their biggest annual profits ever. Over the course of 2022, the five major oil companies more than doubled their profits compared to the previous year. Exxon Mobil It achieved the highest profit so far for any Western oil company, at $59.1 billion. coincidence announced the largest dividend in the company’s 115-year history, chevrons And total energies They have created an unprecedented box office of tens of billions of dollars. This was made possible by the sharp increase in oil prices caused by the Russo-Ukrainian war as we have just described.

The energy crisis that arose as a result of the conflict should have laid the foundations for accelerating the energy transition, but so far only huge profits have been recorded for the fossil fuel industry, with the vision of the Paris Agreement still a long way off.

_{¹ Energy monitoring}

_{Photo: ExxonMobil}