Russian oil supplies to US at ten-year high
The latest data from the US Energy Information Administration (EIA) shows that US-Russian trade relations do not reflect political tensions between the two countries. Russian oil exports to the US was at the highest level since 2012 in January, as American refiners use Russian crude products to fill the gap left by US oil sanctions imposed on Venezuela in 2019.
US refiners are more dependent on Russian oil than ever despite a new deterioration in relations between Russia and the United States, says S&P Global Platts. According to data from the EIA, Russian oil supplies totalled 8% of US total oil imports in January 2021 compared to 4% during 2018. The supplies of Russian crude and products amounted to 648,000 bpd, which was the highest monthly volume since June 2012. Moreover, Russian oil exports to the US exceeded those of its key ally Saudi Arabia for the sixth consecutive month in January 2021.
The pattern is similar to the trend of 2020 when US imports of Russian crude and petroleum products were at their highest level in almost a decade. In 2020, US imports of Russian oil climbed to 538,000 bpd from 520,000 bpd in 2019. The highest level of 624,000 bpd was registered in 2011, reads the EIA’s data.
Fellow in Energy and Global Oil at Rice University’s Baker Institute for Public Policy Mark Finley considers this dynamic to be “clearly market-driven”. It shows how “the interconnectivity of oil markets” can take place even outside of a political context, he says. “It looks and feels to me that this is a pull by US refiners looking to replace some of its heavy oil supplies that were lost by other sources,” explains Finley referring to refineries that have been deprived of access to Venezuelan crude by US sanctions and have turned to Russia to meet some of their requirements.
American refineries continue to ramp up runs, as the economy starts to recover from COVID-19. Earlier, they were particularly reliant on heavy and sour Venezuelan crude, and Russian medium sour oil is quite similar to it. Russian imports to the US include different types of fuel and various feedstocks, such as high sulphur fuel oil, high and low sulphur vacuum gasoil and high and low sulphur straight-run fuel oil. Russian refineries are major producers and exporters of such fuel oil products, while in the US, these feedstocks are crucial for processing in the secondary units of complex refineries.