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Europe Becomes Victim Of Russia’s Newest Oil Strategy

Consumption

Higher shipments of Russian crude oil to China may saddle European importers with a fatter bill, an industry consultancy warned at the end of last year, noting the latest stage of Russia’s Eastern pivot: the launch of the expanded East Siberia-Pacific Ocean pipeline that would lift Urals crude supply to China twofold, to 30 million tons annually. 

 

https://www.zerohedge.com/sites/default/files/inline-images/20180107_russ.png

FGE said in a note quoted by Bloomberg that Russia will start moving more Urals eastward right after the launch of the pipeline extension, at a rate of 160,000 bpd. The overall increase of Russian crude shipments to China, according to the consultancy, could be around 200,000 bpd.

This means less oil for Europe, which is Russia’s number-one oil client. This only highlights the significance of Moscow’s Asian pivot amid lingering European sanctions following the 2014 annexation of Crimea and Russia’s involvement in separatist conflicts in the Ukraine.

In 2016, Russia exported an average 3.7 million barrels daily to European countries, compared with less than a million bpd to China, according to figures from the Energy Information Administration (EIA). In percentage figures, Europe accounted for 70 percent of Russia’s 2016 crude oil exports, while the share of China was just 18 percent. Yet this is changing fast, as this chart from the EIA shows:

(Click to enlarge)

The rise in Chinese exports has been quite steep since 2014: as of November last year, Russia shipped 1.3 million barrels of oil daily to China. All the latest signs point to further growth. However, exactly how much this would hurt European buyers is unclear.

The Urals is currently trading at a discount of about $4 to Brent crude but WTI’s discount to the international benchmark is $6 a barrel. In other words, Russia’s diverting of crude oil from Europe to China could be an opportunity for U.S. exporters as long as they can keep their transport costs low enough. Europe will probably be grateful for the diversification.

Over the long term, things are even more uncertain. Clearly, Russia has prioritized its relationship with China: In addition to the ESPO expansion, Gazprom is on track to complete the Power of Siberia gas pipeline by 2019. The 2,500-km mammoth of a pipeline will pump 1.3 trillion cu ft of gas to China annually.

The country is already the third-largest consumer of natural gas in the world, behind the U.S. and Russia, and is expected to show the strongest demand growth over the coming decades—propelling it to second place by 2040 as the economy shifts away from coal.

This soaring demand has already created shortages in parts of the country. A recent report by Eurasia Daily suggested the Power of Siberia will be essential in avoiding future gas shortages. Would that take gas away from Europe? It’s unlikely given Gazprom’s 30+-percent market share in Europe, and besides, there’s enough gas for everyone. What might happen is China overtaking Europe as Russia’s biggest gas export market at some point in the future, especially if Russia–EU relations continue to be strained.

OilPrice.com



81 Comments on "Europe Becomes Victim Of Russia’s Newest Oil Strategy"

  1. MASTERMIND on Thu, 11th Jan 2018 9:06 pm 

    Greg

    You should change your name to the “Paranoid prepper”

  2. MASTERMIND on Thu, 11th Jan 2018 9:11 pm 

    Playboy features first transgender model on its German cover

    http://www.dw.com/en/playboy-features-first-transgender-model-on-its-german-cover/a-42102234

  3. GregT on Thu, 11th Jan 2018 9:35 pm 

    “You should change your name to the “Paranoid prepper””

    There’s nothing to be paranoid about MM, unless you’re unprepared.

  4. antaris on Thu, 11th Jan 2018 11:05 pm 

    He’s prepped, but does the g friend know about it ?

  5. Makati1 on Thu, 11th Jan 2018 11:15 pm 

    Greg, I may do that. After all, I AM a Leo.

    I wonder that new tag Davy would come up with then? ^_^

  6. Davy on Fri, 12th Jan 2018 5:15 am 

    “I wonder that new tag Davy would come up with then? ^_^”

    Do what you like goofball but please don’t put the stupid avatars you used to parade.
    That was really cheesy and really showed how much of a dork you are.

  7. rockman on Fri, 12th Jan 2018 9:45 am 

    None of those links offered by MM comes even close to supporting his claim that “Existing oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years.”.

    I assume MM expects many to not read the links he offers as “proof” of his claim. Of course oil discovers are on a poor trajectory. But that doesn’t change the estimates made even doomers for the low decline rate of proved producing reserves. To be fair I’m not sure MM is intentionally spinning misrepresentations and outright lies. He may just not be fully knowledgeable of the dynamics at play. So if you have the time to confirm the foolishness of the proposition that “oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years” here again are the links MM offered. In fact, if you take the time to read them in detail they show how idiotic that statement truly is.

    https://imgur.com/a/6dEDt

    https://www.wsj.com/articles/saudi-minister-sees-end-of-oil-price-slump-1476870790

    https://www.theguardian.com/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

    https://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017

    https://www.reuters.com/article/us-aramco-oil/aramco-ceo-sees-oil-supply-shortage-as-investments-discoveries-drop-idUSKBN19V0KR

  8. MASTERMIND on Fri, 12th Jan 2018 10:28 am 

    Rockman

    Thanks for reposting my links you are just proving my point even more…Shouldn’t you have included your favorite site the “Daily Caller”..LOL

    Hey when the oil runs out please dont take it out on your sister/wife! I know how you religious people treat your woman! In Jebus name!

  9. MASTERMIND on Fri, 12th Jan 2018 10:28 am 

    Existing oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years. When it hits the economic and social damage will be catastrophic. The end of Western Civilization, from China to Europe, to the US, will not occur when oil runs out. The economic and social chaos will occur when supplies are merely reduced sufficiently….

    https://www.scientificamerican.com/article/has-peak-oil-already-happened/
    http://www.sciencedirect.com/science/article/pii/S030142151300342X
    http://www.sciencedirect.com/science/article/pii/S0016236114010254
    http://www.geo.cornell.edu/eas/energy/the_challenges/peak_oil.html
    https://imgur.com/a/6dEDt

  10. MASTERMIND on Fri, 12th Jan 2018 10:30 am 

    Rockman

    There are some scholarly sources for you big guy! Don’t you boys have a saying for that? All hat! MORE CATTLE! LOL

  11. rockman on Fri, 12th Jan 2018 10:35 am 

    “You know when Walmart starts to collapse it’s gonna be game over soon! This is deferentially a canary in a coal mine.” Always funny to hear from folks with a bumper sticker mentality of the stock market. Sam’s is public corporation owned by Walmart. Sam’s represents only 4.5% of Walmart’s value. Walmart, the largest retailer on the planet. The 3 store closing in Houston were long overdue for two reasons. First, way over built here.

    Second, and most important, competed directly with nearby Walmarts. We used to go the Sam’s nearby but gave it up: why pay a yearly membership fee to buy the same stuff at the closer Walmart for the same price? Very few folks we saw at Sam’s were buying in bulk.

    But hey, only a fool would take stock market advice from a geologist, right? So let’s see what the market experts think about the closing: Walmart stock increased 1.3% with the news. Not much of an increase but remember what I said above: Sam’s only represents 4.5% of Walmart’s total value.

    So how has the worlds largest retailer been doing as it moves closer “failing”? In the last 12 months the stock has increased from $68/share to $101/share…a 48% increase. What fools those profession stock market analysts are: to not see what is so obvious to our own MasterMind. Here’s the recent Walmart stock history. Looks like that canary in the tunnel has been singing a sweet tune for the Walmart shareholders. LOL.

    https://www.google.com/search?source=hp&ei=gdtYWsvmJIGRjwTxq6HoBA&q=walmart+stock+price+today&oq=walmart+stock&gs_l=psy-ab.1.2.0i131k1l3j0l7.14422.23928.0.28308.13.13.0.0.0.0.226.2703.0j2j11.13.0….0…1.1.64.psy-ab..0.13.2692….0.hOJaxmGmDFU

  12. MASTERMIND on Fri, 12th Jan 2018 10:51 am 

    Rockman

    Closing 60 sams clubs is like closing 300 small stores and gas stations. And what about our largest food chain subway closing thousands of stores as well. What about one of largest power companies in GE laying off thousands. What about Nike and Under Armor going in the toilet. What about Sears, and Macy’s? What about Lego laying off thousands? What about Applebees, and Outback closing hundreds of locations. What about Hollywood having its worst year in 22?

  13. MASTERMIND on Fri, 12th Jan 2018 10:53 am 

    Rockman

    US companies spent $4T buying back their own stock since 08
    https://nypost.com/2017/08/19/us-companies-spent-4t-buying-back-their-own-stock/

  14. GregT on Fri, 12th Jan 2018 11:12 am 

    “So if you have the time to confirm the foolishness of the proposition that “oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years” here again are the links MM offered. In fact, if you take the time to read them in detail they show how idiotic that statement truly is.”

    I’ve already provided quotes from his “global civilization will collapse within the next decade” links. that show how truly idiotic that statement is as well.

    He’s just a troll rockman. Likely disenfranchised with his place in society, after finally figuring out that winning a state chess game doesn’t mean jack shit in the real world.

  15. MASTERMIND on Fri, 12th Jan 2018 11:17 am 

    Greg

    I already provided cherry picked quotes! That really means you disproved it right? Do you know how dumb you sound? If you want to disprove a science study what you do is write your own study. That is how science works. How do I know? I am a scientist!

  16. MASTERMIND on Fri, 12th Jan 2018 11:20 am 

    Greg

    Why dont you go pray with your sheep and guru! And watch out for the deep state who is running the tax farm…And everyone is being brainwashed! except for you of course! LOL

  17. Cloggie on Fri, 12th Jan 2018 11:25 am 

    Note that “Mastermind” appeared at the scene on the very moment Apneaman left the building.

    Millimind gloats about the idea that “white women are going to be used by third world zombies as sex toys”, which makes me curious to the ethnic background of our new forum troll here.

    Expect that the avoids to answer the question but continue to act as a sniper against “us”.

    60-40 he is apneaman.

  18. GregT on Fri, 12th Jan 2018 11:29 am 

    Mm,

    Most of the quotes that I provided were from the summaries of the reports that you linked to. None of them posit that “global civilization will collapse within the next decade”.

    Civilization is likely to look very different within the next decade, but it is not going to completely collapse. Civilization has been around for ~5000 years. 4800 of those years were without modern industrialism, and the mass burning of fossil fuels.

  19. MASTERMIND on Fri, 12th Jan 2018 11:58 am 

    Greg

    Limits to growth projects a global economic collapse by 2030. That was included in the third study. The german army concluded once oil shortages arrived it would. Which are coming in way less than ten years. I just said ten years to give a little wiggle room.

    Just tell yourself over and over again. No collapse wont happen within a decade. Just convince yourself without any reason. You are grasping at straws!

  20. MASTERMIND on Fri, 12th Jan 2018 12:02 pm 

    Clogg

    Oh look clogg has another tin foil hat conspiracy about who I really am. Clog is in a deep state of paranoia! That is what religion does to people!

  21. davy on Fri, 12th Jan 2018 12:09 pm 

    Costco may be part of the reason Sams is downsizing not the economy. Retail in generaL is suffering but places like the home improvement stores and Costco not so much. The malls are taking a big hit from online stores but not these big box stores. There is just no substitute for them besides these stores are going online too.

  22. davy on Fri, 12th Jan 2018 12:17 pm 

    “Dear Reader, Here are five peer reviewed scientific studies authored by top experts that prove beyond any reasonable doubt that global civilization will collapse within the next decade.”

    mm, I don’t have much respects for posts where a raw link is left empty in a comment. Give us the title to the link and the meat of the reference that supports your assertion. The Nederlander (clogged) does this too. A proper comment has information backup not just the “here read this shit I know what I am saying”. People that say shit then put a link after it like they are experts and this link verifies they are experts does not fly in my book. The stupid YouTube and personal WordPress shit likewise is lame when not documented with at least a few words from the source. You are also reposting the same shit over and over redundantly like your “dear reader” comment above. You have some useful info to bring the board show some maturity.

  23. MASTERMIND on Fri, 12th Jan 2018 12:53 pm 

    Davy

    How about you read the studies and learn something new for once. i know thinking for yourself is not common in your area. A raw link? Do you know how dumb you sound! Be a man stop denying.

  24. davy on Fri, 12th Jan 2018 1:01 pm 

    I have read many of your references mm. Many of your references are not current. Slow down a notch and put more effort into targeted points with less data dumping. This will improve your message and board appearance. We all can improve and you are no different.

  25. MASTERMIND on Fri, 12th Jan 2018 1:11 pm 

    Davy

    Not current? They are all less than a few years old. And there is no expiration date for a scientific study. Do you know how dumb you sound.

    Time makes more converts than reason
    -Thomas Paine

  26. MASTERMIND on Fri, 12th Jan 2018 1:15 pm 

    Inventories are now in the low 400 million barrel range. At this rate we will be witnessing a severe shortage of crude oil in about 6 months time

    Storage has gone down drastically in the US. If circumstances don’t turn around soon, expect prices in the 70’s. Shale isn’t helping because it is too “light” for diesel distillation. Normally storage is building up at this time of year, in build up for Spring/Summer drawdown. Should get interesting by April.

    https://imgur.com/a/RWPs1

  27. JuanP on Fri, 12th Jan 2018 2:35 pm 

    Davy “Costco may be part of the reason Sams is downsizing not the economy. Retail in generaL is suffering but places like the home improvement stores and Costco not so much. The malls are taking a big hit from online stores but not these big box stores. There is just no substitute for them besides these stores are going online too.” that has been my experience, too. I do 99% of my shopping online, at Home Depots, Walmarts, and the local Costco. I can’t even remember the last time I bought something elsewhere. You would have to tie me up and drag me to a mall.

  28. MASTERMIND on Fri, 12th Jan 2018 2:43 pm 

    juan

    Online sales make up less than 10 percent of all retail. Its the economy stupid. We have been in a depression the last 11 years. You idiot.

    The Great Recession 2006-2017 US Economic Growth GDP Per Capita (0.4%)
    https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG?locations=US

  29. MASTERMIND on Fri, 12th Jan 2018 2:46 pm 

    The deniers on this site want so desperately for the system to work. They will believe in it till the bitter end. And they will believe whatever bullshit excuse the media uses to cover up for the failing economy.

  30. Davy on Fri, 12th Jan 2018 3:15 pm 

    There I s a difference between failing and a process of failing. The difference is the trees and the forest perspective. There are places throughout the global world that are booming as they are failing. Our civilization is failing systematically. It is failing and it has an end time. In the meantime localized booming and failing will coexist in an undulating plateau. Our civilization is a Ponzi arrangement. Ponzi arrangements are set to fail the minute they are created.

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