A week after the Russian oil boycott goes into effect, the immediate consequences seem even less. But the blockade doesn’t stop Russian oil from reaching Europe in another form, says oil expert Jilles van den Beukel of the Center for Strategic Studies in The Hague.
For the moment, there are few signs of the boycott, oil prices have fallen instead of rising since the blockade. And the Russian oil that is being sold is being sold below the maximum price of sixty dollars a barrel. Van den Beukel mainly thinks of reduced demand from China and the fear of a recession as possible causes.
None of this will make Russian President Putin much happier. Van den Beukel does not foresee his previously announced revenge on the boycott happening any time soon. “He can turn the oil cock like he did the gas cock, but it doesn’t look like he will.”
Cheap refineries
One of the objectives of the boycott is to prevent Russian oil from entering Europe. However, this can still happen with a detour, Van den Beukel says. ‘With an analysis of crude oil, the origin can be determined. But once perfected, it is no longer possible.’ And that’s what’s happening “in practice” at refineries in India and Turkey, notes the oil expert. “There the oil from Russia is refined in cheap refineries into diesel, which can then be shipped to Europe.”
Turkish fear
Near Turkey, many tankers are still waiting to cross the Bosphorus. Turkey blocks access because it wants guarantees on the origin of the oil on board the ships. After all, one element of the boycott is that Western ships with Russian oil on board are no longer insured. “However, the bitter thing about this situation is that in many cases it concerns Kazakhstan’s oil.”
However, the Turkish fear is understandable, thinks Van den Beukel. “Turkey is especially afraid if something happens to tankers, if it turns out to be Russian oil.” And the possibility of an accident with a tanker in the Bosphorus is certainly present. “There’s a lot of oil going through a very narrow stream there.”
Follow developments in Ukraine here on our live blog
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
