Refineries in Europe are looking for alternative crude supplies as they shun Russian imports following Moscow’s invasion of Ukraine.
Poland’s PKN Orlen is ramping up crude oil deliveries from Saudi Arabia and spot North Sea crude purchases following Russia’s invasion of Ukraine. “PKN Orlen reached an agreement on increased deliveries of five additional tankers from Saudi Aramco. In addition, supplies of crude oil from the North Sea were secured for Orlen Lietuva [in Lithuania],” the company said. PKN said in a separate statement that its feedstock supplies were secure, with deliveries proceeding as normal.
Essar, the owner of the UK’s Stanlow refinery, is seeking alternative sources of diesel to supply its UK retail fuel network as pressure mounts on companies to cut ties with Russia over its invasion of Ukraine. Essar said it turned away two cargoes of non-Russian origin crude, which would have been delivered in Russian-flagged tankers after the UK banned vessels on March 1 that are Russian-owned, operated, controlled, chartered, registered or flagged from UK ports.
An increasing number of European oil companies are suspending purchases of Russian crude following Russia’s invasion of Ukraine.
BP, TotalEnergies, Italy’s Eni and Saras, Spain’s Repsol and Cepsa, Portugal’s Galp, Finland’s Neste and Sweden’s Preem have also suspended all new purchases of oil and oil products from Russia.
The European Commission plans to propose by mid-May the “phase-out” of Russian fossil fuels by 2027, EC President Ursula von der Leyen said March 11, after EU leaders met in Versailles to coordinate further responses to Russia’s invasion of Ukraine.
French President Emmanuel Macron also said “nothing is off the table” when it comes to potential new measures against Moscow after being asked whether the EU could consider a more immediate ban on Russian oil and gas imports or blocking Gazprombank from the SWIFT banking system.
Speaking after the summit concluded, von der Leyen said the EU’s priority was to reduce its dependence on Russian fossil fuels.
In other news, Germany’s Schwedt refinery is carrying out normal operations, Rosneft’s German subsidiary said in early March. The refinery is not affected by sanctions imposed on Russia.
Russian crude imports in Germany and German refining operations are running at normal levels, according to a spokesman for German fuels and energy business lobby group en2x.
Germany’s Schwedt and Leuna refineries are supplied with crude via the Druzhba pipeline from Russia.
Germany’s economy ministry has started an investigation into Rosneft expanding its ownership of the Schwedt refinery after the antimonopoly service cleared the Russian state-controlled company’s purchase of more shares, S&P Global Commodity Insights reported, citing media reports.
As a result of the purchase, Rosneft’s share would rise to 91.67% from 54.17%. Rosneft had said Nov. 17 it was exercising a right to acquire a 37.5% stake in the PCK Schwedt refinery and had notified Shell. The deal was expected to be closed after approval by the regulators.
The ISAB plant in Sicily is operating as usual, according to information provided by a source close to the refinery. “Operations are going according to programmed monthly planning,” the source said. The company was not immediately available to comment on the matter. ISAB is owned by Russian energy group Lukoil.
Separately, demand for oil products is rising across Europe.
The volume of vehicle fuels supplied by Spain’s national fuel distributor Exolum to the country’s retail market in February increased 30% year on year to 3.0 million cu m (2.4 million mt) as gasoline and diesel volumes surpassed pre-pandemic levels, according to Exolum data published March 3.
With most travel and social restrictions lifted, supply volumes were only about 4% short of pre-pandemic February levels from 2019 and 2020, the data showed.
The shortfall was because kerosene was lagging, with February volumes up nearly threefold year on year at 307 million cu m (246 million mt) but down around 30% from pre-pandemic levels in February 2020 and February 2019.
Source: Platts
Tags: PKN Orlen, Refineries, Russian Imports, Saudi Arabia, Ukraine Invasion
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