Sanctions on Russia could cut Baltic oil exports by 20 percent

• Reuters has reported that exports of Russia’s flagship Ural crude blend from Baltic Sea ports could fall by 20 percent in December
• This is due to the introduction of a Western price cap and a European Union embargo on Russian oil
• As it has been unable to find suitable vessels, Russia has been unable to fully redirect exports from Europe to other markets, notably India and China

MOSCOW, Russia: Reuters has reported that after the introduction of a Western price cap and a European Union embargo on Russian oil, exports of Russia’s flagship Ural crude blend from Baltic Sea ports could fall by 20 percent in December.

In addition to the EU’s embargo on imports of Russian crude by sea, and similar pledges by the US, Canada, Japan and the UK, beginning 5th December the EU, G7 nations and Australia introduced a $60 per barrel price cap on Russian oil.

As it has been unable to find suitable vessels, Russia has been unable to fully redirect exports from Europe to other markets, notably India and China.

Ural exports from the Baltic Sea ports will probably fall to around 5 million tons this month, from 6 million tonnes in November, with some estimates as low as 4.7 million tons, according to Reuters.

Ural crude has been sold at deeper discounts in December, with leading buyer India buying barrels at well below the $60 price cap.

The impact of the sanctions on Ural crude exports from Russia’s Baltic ports has been affected by reduced non-western demand, especially from China.

Russia stressed that even if it has to cut production, it will not follow the price cap.

In December, only Bulgaria, China, India and Turkey were willing to buy Ural crude, and in some cases, it has been sold to export markets at below overall production cost, including local levies.