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Tuesday, October 23, 2018

Russia has become the main source of oil imports to Europe




Europe is a large market for the tanker industry, but its oil imports are stagnating. Until 2002 the North Sea was the biggest source of oil for Europe, but since then the Former Soviet Union (FSU), and in particular Russia, has become this region's largest source of oil imports.


Going further back to 1995, the Middle East was the largest export area to Europe. But oil imports from the Middle East have declined since 1998 when they were 3.75 mbd - the estimate for 2007 was 2.48 mbd.


While Europe and the Middle East have over the last couple of years been declining as oil sources for Europe, in 2007 oil imports from Africa increased slightly to provide some 16% of total imports – similar in total to the 2007 European Union (EU) oil imports from the Middle East and from Europe.


With declining North Sea oil production and stagnating Russian oil exports from the Baltic area, it could be that Europe will start to take more oil from the Middle East. However not all Middle East oil has always been, or even is, exported by tankers from the Persian Gulf. A large part was in the past exported via the Iraqi pipeline to Ceyhan, and a large part today flows via the SUMED pipeline to Alexandria. Middle East oil to Europe may not therefore necessarily be long-haul oil.





Oil exports from the FSU continue to increase, but almost all the increase in 2007 was in fact delivered via the Baku-Tblisi-Ceyhan pipeline.


Russia is planning a new pipeline to Primorsk on the Baltic, which to a large extent will replace oil exports via the Druzba pipeline. Tanker exports from the Baltic area may therefore in a couple of years start increasing again, perhaps carried by large, shallow draught tankers - which are also being planned.


Contact: Erik Ranheim