NATURAL GAS, TANKERS, OIL AND CHEMICALS, LNG
If Europe changes from Russian oil to elsewhere, does it also mean from pipeline to seaborne import?
Published 1. Mar 2022 12:08 AM
Germany plans to build two new LNG terminals within the near future, to break free from the reliance on Russian pipelines, will it be the same story for crude oil and oil products?
We recently learned that Germany plans to build two new LNG terminals within the near future, which in short terms means increasing seaborne imports over the reliance on Russian pipelines. Over time this will of course be beneficial for the LNG shiiping sector.
The question remains, whether this is the same story for crude oil and oil products?
The answer is yes and no, according to IEA, roughly 750 kb/d of a total 3.1 mb/d crude oil is delivered to Europe via the Druzhba pipeline system, which in theory is not that much, and in shipping terms around three MR tankers (one MR tanker equal to 250 – 350 kb). The most immediately at risk are the around 250 kb/d of Russian oil transiting Ukraine via the southern branch of the Druzhba pipeline to supply Hungary, Slovakia, and the Czech Republic.
It does look like there might be some short term gains from Europe looking elsewhere for their oil imports, and that is usually the case when there is a disruption on the supply chain, as shipping is the most flexible way of transporting large volumes of cargo.
In the long term it is quistionable and it seems that Europes main focus is doing a faster conversion into renwables, rather than looking for a new long term crude oil supplier.
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