IMPLICATIONS OF EUROPEAN BAN ON RUSSIAN OIL

Russia is the world’s second largest petroleum exporter. About 5mb/d of crude oil and petroleum products are exported to Europe. A European ban on Russian petroleum imports would have an immediate effect on >1mb/d of pipeline imports. Moreover, 4mb/d of crude and products that currently go to Europe via tankers would have to find a new home, which would create massive problems for the global refinery system. Depending on the speed of the phase-out, we could see the loss of >3mb/d of Russian production near term. Over the long run, Russian production will likely decline due to the lack of western technology transfer.