In December, the import of Russian oil to the EU fell by 270,000 barrels per day compared to November. Thus, in total, up to 900,000 barrels per day were supplied, according to data from the International Energy Agency cited by Reuters, BTA reports.

The fall was the result of an embargo on the import of Russian oil by sea to the EU, which came into force on December 5, as well as the limitation of the price of Russian oil at $60 per barrel by the G-7 countries. These measures are a direct consequence of Russia’s invasion of Ukraine, which began almost 11 months ago.

Where did Russian oil go until December?

The majority of Russian oil sent by sea to EU countries, or 160,000 barrels out of a total of 230,000 barrels, is imported to Bulgaria, which is exempt from the embargo. One oil tanker arrived in Italy and two others in the Netherlands, the International Energy Agency (IEA) said in its monthly report published on Wednesday. Since January, only Bulgaria has the right to import Russian oil by sea to the EU, AIE adds, 24 CHASA and Rador report.

How does the Druzhba pipeline work?

The export of Russian oil through the Druzhba pipeline, which leaves Russia and branches in two directions, is not subject to the embargo. The northern part passes through Belarus and Poland and reaches Germany, and the southern direction crosses Ukraine and Slovakia and reaches Hungary and the Czech Republic.

German refineries in Lojna and Schwedt, which are connected to the pipeline, stopped buying Russian oil at the end of 2022. However, Germany plans to import 30,000 barrels per day from Kazakhstan through the pipeline.

This means that Druzhba’s output will also drop by about 330,000 barrels to 360,000 barrels per day, and the share of Russian oil in European imports will drop to just 5% from 27-30% before the war.

Where does Russia sell oil?

Russian oil exports to India hit new highs of 1.4 million bpd in December, while shipments to China by sea and pipeline were little changed at 1.9 million bpd, according to IEA data.

Exports to Turkey fell by 200,000 barrels to a multi-month low of 45,000 barrels. Azerbaijan’s state-owned company SOCAR announced last month that it would stop buying Russian oil for its refinery in Turkey.

In December, the first shipment of oil in seven months went to Japan from the Sakhalin-2 complex, which is partly owned by Japanese companies and is outside the G7 price range.

What alternatives to Russian oil did the EU find?

Total imports of Russian oil into the EU – by sea and pipeline – fell by 1.6 million barrels in December compared to February.

Instead, the EU is betting on increased imports from the Middle East, West Africa, Norway, Brazil and Guyana, the IEA report said.

The US and Kazakhstan are also potential alternatives, according to AIE. Kazakhstan reached a preliminary agreement with Moscow on the export of oil to Germany through Russian pipelines.

In December, Norway increased output at Western Europe’s largest Johan Sverdrup field to 720,000 barrels per day, up from 535,000 barrels previously. “This is good news for European refiners, as Johan Sverdrup oil is the best alternative to Russian Ural oil,” the IEA notes.

Impact on oil refineries

Europe’s dependence on Russian oil is manifested mainly through the control of some of the largest oil refineries in the EU by Russian companies, mainly Rosneft and Lukoil.

Germany has already taken measures in this regard and took control of Rosneft’s Swedt refinery, which supplies about 90% of Berlin’s fuel, as well as Rosneft’s minority stakes in two other refineries, MiRo and Bayernoil.

Lukoil has agreed to sell its Italian ISAB refinery to GOI Energy, a private Cypriot investment company backed by Geneva-based trading firm Trafigura, but still owns refineries in Bulgaria and Romania.

The Bulgarian parliament has cleared the way for the government to take control of Lukoil Neftokhim Burgas to ensure security of supply if necessary. The refinery is exempt from the EU oil embargo, but there are restrictions on the export of the petroleum products it processes.

In neighboring Romania, Lukoil told the authorities that it had found an alternative to Russian oil and that its gas stations were not subject to the ban on Russian oil imports.

As another measure against the Russian invasion of Ukraine, a ban on the import of Russian petroleum products, in particular diesel fuel, entered into force in the EU on February 5, 24 CHASA and Rador report.