EU, UK rush to import Russian diesel ahead of ban, no alternative supplier in sight yet

Europe and UK, in the last few weeks, have been rampantly importing Russian diesel oil having no alternative energy supplier just ten weeks to go for the ban to come into effect. Both the UK and European Union have imported half of their total diesel fuel import needs from Moscow in the first twenty-four days of November, Bloomberg reports. The data suggests that the bloc and the UK together imported an average of 1.34 million barrels a day of diesel via tankers and cargoes between November 1 to 24. Russian crude oil imports will be banned from December 2022 and refined petroleum products from February 2023 with limited exceptions under the European Union sanctions package adopted in response to Russia's President Vladimir Putin's military invasion of Ukraine.

In June 2022, the EU Council adopted the sixth package of sanctions that prohibited the purchase, import or transfer of crude oil and certain petroleum products from Russia to the EU. The restrictions will come into effect from 5 December 2022 for crude oil and from 5 February 2023 for other refined petroleum products. Although, some member states such as Bulgaria and Croatia specifically will benefit from temporary derogations concerning the import of Russian seaborne crude oil and vacuum gas oil respectively due to heavy reliance on Russian energy. The restrictions end of this month, 2022 will cover nearly 90% of Russian oil imports to Europe.

"A temporary exception is foreseen for imports of crude oil by pipeline into those EU member states that, due to their geographic situation, suffer from a specific dependence on Russian supplies and have no viable alternative options," EU announced whilst adopting the sanctions package. 

Data shows that the Russian diesel oil import in the last month was the highest compared to the total imports in the first ten months of 2022 when the EU and UK had shipped close to 600,000 barrels per day from Russia. This comprised an estimated 45% of the total diesel imports. In October UK and the Europe imported from Moscow just about 34% of their total diesel needs but in the last ten months this spiked to an estimated 51%.

Diesel-loaded tankers from Russia arrive via Baltic Sea port of Primorsk

The shipments of Russian diesel fuel to the EU and UK were done via the Baltic Sea port of Primorsk and the cargo traffic witnessed a significant rise in the last few days as the bloc prepared to implement the total ban on oil imports from Moscow in response to its brutal invasion of Ukraine. Tankers also transited via the Amsterdam-Rotterdam-Antwerp area,  Europe’s largest northwest oil trading hub. December is the last month wherein the traders of ICE Gasoil -- Europe’s main diesel futures market -- can ship Russian fuel into storage locations in the ARA region where it can be stored ahead of the sanctions. 

Some of the EU members, such as Germany, still haven't found an alternative supplier to replace the Russian natural gas, despite the country reaching an agreement with Qatar, the chairman of the Bundestag committee on energy, Klaus Ernst, informed on Twitter. The gulf state is expected to supply two million tons of liquefied natural gas (LNG) a year to Germany, but the agreement will be implemented in 2026. The deal will last up to 15 years and comprises only 6% of the total volume that Germany imported from Russia in 2021. Once the shipment beings, it will be exported via US energy major ConocoPhillips' joint ventures in Qatar to the Brunsbuttel floating import terminal in Berlin.