RUSSIAN oil output is set to fall 1.4 million barrels per day (BPD) next year after an EU ban on seaborne exports of russian crude comes into effect, reports Reuters.
The move to deprive Moscow of revenue will create more uncertainty for oil markets and pressure prices.
'The approaching EU embargoes on Russian crude and oil product imports and a ban on maritime services will add further pressure on global oil balances, and, in particular, on already exceptionally tight diesel markets,' said the International Energy Agency (IEA).
'A proposed oil price cap may help alleviate tensions, yet a myriad of uncertainties and logistical challenges remain and the range of uncertainty has never been so large.'
The EU will ban Russian crude imports from December 5 and Russian oil products from February 5, depriving Russia of oil revenues.
In addition, a G7 plan will allow shipping service providers to help export Russian oil, but only at enforced low prices.
It means the EU will need to replace one million BPD of crude and 1.1 million BPD of oil products, with diesel especially scarce and expensive, with prices 70 per cent higher than this time last year.
'The competition for non-Russian diesel barrels will be fierce, with EU countries having to bid cargoes from the US, Middle East, and India away from their traditional buyers,' said the IEA.
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The move to deprive Moscow of revenue will create more uncertainty for oil markets and pressure prices.
'The approaching EU embargoes on Russian crude and oil product imports and a ban on maritime services will add further pressure on global oil balances, and, in particular, on already exceptionally tight diesel markets,' said the International Energy Agency (IEA).
'A proposed oil price cap may help alleviate tensions, yet a myriad of uncertainties and logistical challenges remain and the range of uncertainty has never been so large.'
The EU will ban Russian crude imports from December 5 and Russian oil products from February 5, depriving Russia of oil revenues.
In addition, a G7 plan will allow shipping service providers to help export Russian oil, but only at enforced low prices.
It means the EU will need to replace one million BPD of crude and 1.1 million BPD of oil products, with diesel especially scarce and expensive, with prices 70 per cent higher than this time last year.
'The competition for non-Russian diesel barrels will be fierce, with EU countries having to bid cargoes from the US, Middle East, and India away from their traditional buyers,' said the IEA.
SeaNews Turkey
