Exclusive-Russia hikes oil exports from major Eastern port to help offset EU ban -Breaking
(Reuters) – Russia increased its oil exports from Kozmino, its main eastern port, by about a fifth to help meet rising demand and counter the effects of sanctions imposed by the European Union. Three sources close to the matter confirmed that this was done in order for Reuters.
Moscow said that it hopes to reroute oil exports from West to Asia. However, doing this via long tanker trips from European ports to Asia is difficult and costly due to Western sanctions regarding the conflict in Ukraine.
Russia’s oil pipeline monopoly Transneft already increased crude oil pumped to Kozmino via its main Asian route, East Siberia Pacific Ocean pipeline (ESPO), by 70,000 barrels/day (bpd). This was according to sources speaking under condition of anonymity.
Transneft has not yet responded to comment requests.
Sources said that Moscow will also be sending a further 80,000 bpd (or ESPO Blend) crude to Kozmino using rail from Meget. The route used previously to transport Kozmino as well as domestic refineries during the construction of the ESPO pipeline.
Kozmino will be able to boost overall loads to around 900,000. Compared to an average load of approximately 750,000 per day this year, the new supplies will help them increase their total loadings. Kozmino will load approximately 720,000 tonnes per day in 2021.
Two sources confirmed that ESPO’s oil exports through Kozmino will reach an all-time high at around 880,000 bpd by July.
The EU announced last week that it was imposing an oil embargo on Russia, stating that imports from Russia of up to 90% would be stopped by the end.
China and India, both of which have repeatedly criticized Western sanctions against Moscow, are buying more Russian oil as a result of a drop in the price.
The ESPO pipeline has an aggregate capacity of 1.64 millions bpd. It connects Russia’s Siberian oilfields to Kozmino, China costumers, and Kozmino.
Kozmino can handle loads up to 1 million barrels per day, according to one source. However, the limited capacity of its pipeline and rail infrastructure won’t permit it to do so without additional construction.
It may need to make more Suezmax vessels due to the increase in oil loads from Kozmino. These Suezmax vessels typically hold 800,000.-1,000,000 barrels. Aframax vessels weighing between 500,000 and 750,000 barrels are usually loaded by the company, which is considered to be more appealing to buyers.