Global oil market adjusting as Russia hit by sanctions, says Saudi Aramco

27 October 2022, 12:07 PM
The oil market is undergoing restructuring (Photo:PASCAL ROSSIGNOL \ Reuters)

The oil market is undergoing restructuring (Photo:PASCAL ROSSIGNOL \ Reuters)

Saudi Aramco has said the global oil market is already adjusting to sanctions on Russia, the Bloomberg business news agency reported on Oct. 26.

While Moscow is redirecting crude flows to Asia from Europe, other producers are making the opposite switch, Amin Nasser, chief executive officer of the world’s biggest oil company, said at the Future Investment Initiative event in Riyadh.

“A realignment is happening. Russians, with the right discount, are able to place their crude in different markets.”

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Those discounts are helping Russia overcome the difficulties it has securing insurance and shipping for its oil, Nasser said, as the United States and Europe tighten sanctions following Russian dictator Vladimir Putin’s invasion of Ukraine.

“There are logistical issues, insurance issues,” Nasser said.

“But that’s being handled with the right discounts. The flow is going to Asia – though, it takes longer. And crude that used to go to Asia is now being directed to Europe and other parts of the world.”

In September, Russia’s oil export revenues fell to $15.3 billion, which is the lowest figure this year, against the background of a drop in oil exports and oil prices.

The United States offers to limit the price of Russian oil to $60 per barrel. This is probably enough to reduce Moscow’s energy revenues while still ensuring it is profitable to extract.

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