The European Union moved a step closer today to banning all Russian oil imports, something that will have enormous repercussions for the aframax trades.
European Commission president Ursula von der Leyen, addressing the European Parliament in Strasbourg this morning, proposed to EU’s member nations to phase out imports of crude oil within six months and refined products by the end of the year, something she conceded would take some persuading to pass via all 27 members, many of whom are especially reliant on Russia for energy security.
“We will make sure that we phase out Russian oil in an orderly fashion, in a way that allows us and our partners to secure alternative supply routes and minimises the impact on global markets,” von der Leyen said.
The EU gets about 25% of its oil from Russia, most of which goes toward gasoline and diesel for vehicles.
The EU already has an embargo on Russian coal imports in place while discussions are ongoing on how best to ween the continent off Russia’s natural gas supplies with many countries busy in recent weeks seeking out floating gas platform solutions.
The EU oil ban would require all 27 members to agree, something that could prove difficult with Hungary and Slovakia in particular voicing opposition to the move.
A new shipping markets report from Danish Ship Finance published today suggested the changing seaborne tanker trading map in the wake of Russia’s invasion of Ukraine would have a negative impact on the aframax segment, while the suezmax and VLCC segments might benefit.
10% of the aframax fleet could be at risk of running out of employment in the short run, as the Russia to Europe/North America trade makes up over 50% of the segment’s total trade, Danish Ship Finance warned, adding that China could come to the rescue of aframax owners, potentially sourcing more oil from Russia’s Far East.
In related news, Norway has said it will close its borders and ports to Russian trucks and ships from Saturday, joining sanctions imposed by the European Union and the UK among others.