Sunday, February 19, 2023

What Oil Embargo?

 The oil company Shell and energy trader Vitol have been accused of exploiting a “loophole” in the EU sanctions regime to bring products derived from Russian oil into Europe through Turkey.

The EU implemented a ban on importing seaborne Russian crude oil on 5 December – the same day as a G7 price cap on Russian seaborne exports – and the ban was extended on 5 February to refined products such as diesel and fuel oil.

However, refineries in India and Turkey have increased their imports from Russia since the start of the war and have been accused of providing a “back door” for Russian oil exports to be refined, re-badged and exported around the world.

Analysis of data from commodity tracker Kpler by the non-profit group Global Witness found that Shell had imported more than 600,000 barrels of refined products into the Netherlands from Turkish refineries known to import Russian oil since 5 December.

While it cannot be proved whether the products were definitely derived from Russian crude, Turkish refineries are importing vast quantities from Russia, which can then be immediately refined or blended with crude from other nations.

Global Witness showed that in 2022 Turkey imported 143m barrels of crude from Russia, a 50% increase from 2021. One refinery dominated that trade – Star in Aliaga, on Turkey’s Mediterranean coast. The refinery is owned by the Turkish division of Azerbaijan’s state oil firm Socar. It took more than 60m barrels of crude from Russia in 2022, 73% of its imports. The Izmit and Aliaga refineries, owned by Tüpraş, the largest refinery company in Turkey, also handled Russian-origin crude.

Vitol, the world’s largest independent energy trader, sourced 2.77m barrels from the Star and Izmit refineries for delivery to Latvia, Cyprus and the Netherlands since the start of the war in Ukraine.

The EU imported 5m barrels of refined products from Turkey since 5 December, and 20m barrels from refineries that handle Russian oil during 2022. Star alone sold 17m barrels of refined products into the EU in 2022. Europe continues to import about 250,000 barrels a day via pipeline from Russia as it attempts to balance hurting the Russian economy with concerns over supplies and fuel prices.

Shell and Vitol accused of prolonging Ukraine war with sanctions ‘loophole’ | Shell | The Guardian

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