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Russian Supply Drop of 1.1mbpd from EU Ban & G7 Price Cap: S&PGlobal

OIL

Up to 2.5mbpd of seaborne oil from Russia to Europe could be impacted by EU sanctions and the G7's price cap on Russian oil according to analysts at S&P Global Commodity Insights.

  • Significant uncertainty remains over the impact of the G7 price cap and an EU ban on crude from Dec 5 and products from Feb 5. The G7 have yet to set the maximum price at which shippers may transport Russian crude and products but it is widely expected to be around 60$/bbl for crude.
  • Russia has repeatedly said they will not supply fuel to nations who introduced a cap on fuel prices. China, India, and Turkey have already increased imports significantly as Europe imports have dropped since March.
  • "There is still a lot of uncertainty...the price cap level has still not been set," according to S&P Global Commodity Insights. "We do assume that the use of non-western shipping insurance and services will be used to move a good chunk of [displaced] Russian crude."
  • "We still forecast the need to re-route about 2.5mb/d of banned EU crude and product imports by Q1 to cause a supply drop of 1.1mb/d between Oct 2022 and Feb 2023," said Paul Sheldon, chief geopolitical adviser at S&P Global.
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Up to 2.5mbpd of seaborne oil from Russia to Europe could be impacted by EU sanctions and the G7's price cap on Russian oil according to analysts at S&P Global Commodity Insights.

  • Significant uncertainty remains over the impact of the G7 price cap and an EU ban on crude from Dec 5 and products from Feb 5. The G7 have yet to set the maximum price at which shippers may transport Russian crude and products but it is widely expected to be around 60$/bbl for crude.
  • Russia has repeatedly said they will not supply fuel to nations who introduced a cap on fuel prices. China, India, and Turkey have already increased imports significantly as Europe imports have dropped since March.
  • "There is still a lot of uncertainty...the price cap level has still not been set," according to S&P Global Commodity Insights. "We do assume that the use of non-western shipping insurance and services will be used to move a good chunk of [displaced] Russian crude."
  • "We still forecast the need to re-route about 2.5mb/d of banned EU crude and product imports by Q1 to cause a supply drop of 1.1mb/d between Oct 2022 and Feb 2023," said Paul Sheldon, chief geopolitical adviser at S&P Global.