According to data from Refinitiv Eikon and traders, Norway’s Johan Sverdrup Oil is the clear winner in the race to replace Russian oil at European refineries, Reuters reports.

Johan Sverdrup was launched in 2019, making it a relative newcomer compared to Russia’s Urals oil class.

Initially sold mainly in Asia, the EU’s ban on Russian oil imports by sea, imposed in December, opened up the European market, where Johan Sverdrup Middle Grade has become a key feedstock for refiners in countries such as Germany, Poland and Finland.

The Russians now have to pay for longer trips to Asia, where India and China continue to buy from, and Johan Sverdrup has become one of the most sought after in north-west Europe.

Johan Sverdrup and Urals are medium acid grades with high diesel yields, the Norwegian grade is very close to its Russian competitor in terms of quality and lower sulfur content.

“It became a key element”

European refiners import a wide range of grades from around the world, including low-fat crudes from Kazakhstan, Azerbaijan and Africa, for example, to make kerosene and gasoline.

“Johan Sverdrup has become a key element of the European oil industry, effectively replacing Urals as the benchmark intermediate grade,” said Viktor Katona, senior crude analyst at Kpler.

Polish imports of Johan Sverdrup oil through the port of Gdansk rose to a record of more than 8 million barrels in March, according to data from Refinitiv Eikon.

In February, Poland stopped receiving Russian oil, and leading oil refiner PKN Orlen terminated its single supply contract with Tatneft.

Supplies to Asia have decreased

PKN’s Orlen Mazeikiu refinery in Lithuania is also ramping up purchases of Johan Sverdrup crude, taking at least two deliveries this month of about 1.2 million barrels.

In addition, this Norwegian oil now accounts for at least half of Finland’s monthly oil imports, data from Refinitiv Eikon shows.

Norway’s Equinor can currently produce 720,000 barrels per day (bpd) of Johan Sverdrup oil, but said it would explore increasing production to 755,000 bpd.

As Europe ramps up purchases, Johan Sverdrup’s oil shipments to Asia have plummeted.

Demand in Asia is expected to top 100 million barrels in 2021, compared with just 2 million barrels delivered this year, according to data from Refinitiv Eikon.

Urals oil, record deliveries to Asia in 2023

Urals oil is taking over the demand in Asia, its sales increased 10 times in 2022 and this year.

According to the data, sales of Urals oil to Asia have already reached half of last year’s volume, pointing to record deliveries in 2023.

Some Russian oil still goes to Europe. Bulgaria received an exemption from the EU to continue importing Urals crude, while Slovakia, Hungary and the Czech Republic continue to import through the Druzhba pipeline. (news.ro)