Daily Energy Report
Europe imports Russian oil, Saudis and Israel talk uranium, Canada pipeline impact, US refinery problems, Russia limits exports, China’s rising gas demand, California squeezes diesel rigs, and more.
Chart of the Day: Europe’s Indirect Oil Imports from Russia
India’s exports of petroleum products have been increasing since the Russian invasion of Ukraine as shown in Figure (1) above. Major importers include France, the Netherlands, and the UK. Some of the exports to Turkey are suspected to have been re-exported to Europe. Exports to the Netherlands have been re-exported to other European countries.
EOA’s Main Takeaway
Despite sanctions on Russian crude and petroleum products, Europe has been importing Russian oil directly through several countries, mainly India, China, and some OPEC+ members. Those countries increased their imports of Russian crude, refined it, and then exported it to Europe. Although this looks like “oil laundering,” it is perfectly legal. Some of our readers might be surprised to know that the G7 and the EU made it legal by design and had written an exemption in the sanctions decision.
What is illegal is the re-exports of imported Russian crude or petroleum products. However, it is also happening, but political leaders do not want to talk about it for fear of higher prices.
Story of the Day
Truckers in California are purchasing more diesel trucks in advance of a new mandate phasing out these vehicles to avoid higher costs and challenges associated with electric trucks. The new California rule aims to eliminate the use of diesel trucks, banning over 30,000 diesel big rigs by 2035. The new emissions mandate kicks in on Jan 1, 2024. Electric trucks are triple the cost of diesel rigs, with limited availability.