Oil buyers in southern Europe are quietly returning to the market for Russian crude, with a European Union ban on such shipments still four months away from coming into force, Bloomberg reported.
Shipments of Russian crude to ports in Italy and Turkey rose to multi-week highs in the seven days to Aug. 5, offsetting another drop in shipments to customers in northern Europe, according to vessel-tracking data monitored by Bloomberg. Shipments from Russia to the Mediterranean region as a whole were the highest since mid-June.
Deliveries of crude from export terminals in the Baltic and Black Sea to refineries in Italy rose to a seven-week high, while shipments to Turkey were the biggest in six weeks. Spain took its first cargo of Urals crude since April, with a shipment belonging to Kazakhstan’s KazTransOil delivered to Bilbao. Last week also saw the first Urals shipment from the Baltic to Greece since February.
The increased flows to several European countries ahead of sanctions coming in to effect highlight the difficulty the region will have in ending its reliance on Moscow's oil. The identification of some of those cargoes as non-Russian, even though they are a Russian grade shipped from a Russian port, shows just how difficult it will be to police the sanctions when they do come into effect in December.
Based on current destinations, the average flow of Russian crude to Asia remained close to 1.75 million barrels a day, down from a plateau of more than 2.1 million barrels a day in April and May. Shipments to European buyers including those in northern Europe, the Mediterranean and the Black Sea region rose to a five-week high of 1.38 million barrels a day, but they are still down from more than 1.85 million barrels a day before the Ukrainian war.