Buyers are boycotting Russian oil, despite a huge discount

According to analysts, large oil buyers are boycotting Russian Urals oil because of the situation in Ukraine, despite the fact that Russia offers a discount to the market of up to $20 per barrel. Experts note that about 70% of Russian oil exported is difficult to find buyers. 

And although American and European sanctions do not restrict energy exports from Russia, ordinary buyers prefer to look for alternative sources of supply. To date, only a few refiners and traders buy Russian oil, but a sharp increase in the cost of freight and the appearance of «military» premiums for risk insurance significantly complicate transactions.

Europe is mainly switching to oil from the Middle East. Until now, European countries were the largest export market for Russian oil (the region accounted for about 53% of supplies). Another 39% of exports go to Asia.

At the same time, it has already become known that Asian countries are also gradually abandoning Russian oil. In particular, the Times of India newspaper reported that the country's largest oil refining company Indian Oil Corp. it will no longer purchase Russian oil, as well as oil from Kazakhstan on FOB terms (the costs of cargo delivery to the port of shipment are taken into account), since these conditions do not take into account the increase in the cost of freight and risk insurance.

The pressure on the energy sector is also exerted by gas, the cost of which has soared by 57% in Europe today – to $ 2,227 per thousand cubic meters. German Economy Minister Robert Habeck said that the worst-case scenario of sanctions against Russia has not yet materialized, as the country continues to export gas. At the same time, he added that it is necessary to prepare for the worst-case scenario. It is worth noting that Russia provides about 40% of gas supplies to Europe.