Russia seems to be struggling to sell its oil. Because its buyers are afraid of being labeled as pro-Russian. Apart from this, oil buyers are seen to distance themselves from Russia due to supply problems and fear of further sanctions on Russia. Significantly, after Russia’s attack on Ukraine, many types of sanctions have been imposed in many countries including America. Its effect is being seen on Russia’s oil exports.
The special thing is that no direct sanctions have been imposed on Russia’s energy industry. Despite this, Jarand Rystad, head of Rystad Energy, says that Russia may have to bear a loss of about 1 million per day in its exports. Let us tell you that in the past Russia exported 15 million barrels per day. This situation is when due to the difficulties in the supply of crude oil all over the world, there is a strong increase in its prices all over the world.
This week Brent crude reached around $ 120 per barrel. While gas prices are also at their record highs. Let us also inform that in the meeting held on Wednesday, OPEC and other oil exporting countries, including Russia, have refused to increase the production of crude oil. This has hurt the expectation of a supply related problem.
Experts say that crude oil prices are currently in favor of Russia, but there is a famine of customers for it. Energy experts estimate that Russia’s oil exports have fallen by 70 percent. The reason for this is that despite the lack of oil in the market, brokers and refineries are better off staying away from Russia. So far, sanctions imposed on Russia by Western countries have avoided the imposition of sanctions on Russia’s energy sector. Because Europe is heavily dependent on Russia for its energy supply.
Germany bought 55 per cent of its gas requirement from Russia last year. Still continues through Russia’s gas pipeline, but there is a fear of sanctions on these too. In such a situation, European importers are seen looking for other options. Finland’s energy group Neste has said that it has almost fully explored an alternative to Russian crude. Similarly, Sweden’s bitumen product Nynas says that it will not buy raw materials from Russia.
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Despite this, experts feel that some buyers may turn to Russia if Western countries refrain from imposing strict sanctions on Russia’s energy sector. The name of China and India may be included in this. However, they are not buying oil from Russia right now. But once the shipping, insurance and payment issues are resolved, they can buy oil from Russia.
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