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Global Oil Faces Turbulence as Sanctions Hit Russia’s Biggest Producers, IEA Says
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The International Energy Agency (IEA) warned that US and UK sanctions on Russia’s oil giants Rosneft and Lukoil could have “the most far-reaching consequences for global oil markets,” The Moscow Times reported, citing IEA report on November 13.
In its latest monthly report, the IEA noted that while Russian exports remain relatively stable, the country’s oil output is growing at a fraction of Saudi Arabia’s pace—only 120,000 barrels per day since January, compared to Riyadh’s 1.5 million. Much of Russia’s crude now sits idle in tankers functioning as floating storage, rather than reaching buyers.
The agency said the dismantling of Rosneft’s and Lukoil’s global value chains “poses risks far beyond Russia’s borders.” The new US measures, set to take full effect on November 21, appear “tougher” than previous rounds, already reflected in reduced shipments to India, The Moscow Times wrote.
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Although the IEA has kept its forecast for Russia’s output steady at 9.28 million barrels per day for the current quarter, it warned of a “significant downside risk” as sanctions enforcement tightens. Russian oil revenues fell to a five-month low of $13.1 billion in October, the agency reported.
According to Bloomberg, citing data from Vortexa, Kpler, and OilX, up to 40% of oil now stored in tankers belongs to sanctioned producers—mainly Russia, Iran, and Venezuela. Russia accounts for the fastest buildup, with volumes in floating storage rising 9% since late August to nearly 388 million barrels.
Earlier, it was reported that Yanchang Petroleum, one of China’s largest oil refiners, is diversifying its crude oil sources, seeking non-Russian oil for deliveries from December to February, according to Reuters, citing their trade sources.
Previously a regular buyer of Russian oil, primarily from the Far East export grade ESPO blend or Sokol, Yanchang is now avoiding Russian crude amid concerns over falling afoul of Western sanctions.
