SINGAPORE— Russian fuel is expected to come to Asia and the Middle East, while fuels produced there are expected to flow to the West, Vitol’s Chief Executive Officer Russell Hardy said on Monday.
More than a million barrels per day of U.S. crude is expected to go to Europe to fill the gap in Russian supplies, he told a forum at the 38th Annual Asia Pacific Petroleum Conference (APPEC) 2022 conference, adding that Russian commodities would need to find a home in places outside the United Kingdom, United States and European Union.
“It’s going to go further and longer distances and find different markets, and in doing that it’s going to have to trade at a discount,” Hardy.
“You’re beginning to see that with fuel coming East that would otherwise have stayed in Europe, and fuel in the East going to the West to cover the shortfall.”
The EU is set to ban Russian crude oil from December in a move to strip the Kremlin of revenue, following Moscow’s invasion of Ukraine.
Russian crude oil imports into the EU and UK last fell to 1.7 million barrels per day (bpd) in August from 2.6 million bpd in January, according to data from the IEA, though the EU was still the biggest market for Russian crude.
The IEA also forecasted that the United States could soon overtake Russia as the main crude supplier to the EU and the UK combined.