Sanctions against Russian oil companies may significantly affect exports to India and Turkey. The approaching November deadline of the West increases the risks of oil trading.
The new sanctions imposed by the USA and the European Union against Russia and its oil companies Rosneft and Lukoil have not yet affected the export of oil from ports in the west of Russia. This was pointed out by oil market sources and LSEG data. Reuters reported about it.
Despite problems due to bad weather and pressure from Western sanctions, Russia is expected to export around 2.33 million barrels per day (1 barrel = 159 liters) from its western ports of Primorsk, Ust-Luga and Novorossiysk in October. This is in line with Russia’s revised monthly oil export program, sources and LSEG data said.
It is the western ports of Russia that are under increasing pressure as a result of the sanctions, as the Urals oil exported through these ports goes to India and Turkey. However, these countries are expected to adapt to the new Western sanctions on the Russian oil sector.
The term will cause problems
The USA set November 21 as the last date for the termination of contracts with the Russian concerns Rosneft and Lukoil. Considering that the voyage of tankers from Russian Baltic ports to India takes about four weeks, the oil loaded at the ports during this period will probably arrive to Indian buyers after the specified deadline. This increases both logistical and financial risks.
“Everything loaded in Primorsk now will arrive in India after November 21,” said one of the oil market sources. He added that this could make it difficult for banks to pay for the supply of this oil, pointing to the fact that Russian sellers do not want to be paid in rupees.
Sources from the oil market said that, according to them, the sale of Russian oil will be transferred to intermediaries and trading companies. This will mean higher costs for sellers, but may protect buyers from the risks of sanctions.
