What are the alternatives to Russian oil in Europe?
Caliber.Az interview with Dmitry Zavorotny
INTERVIEWS - 24 May 2022 - 15:43
Caliber.Az presents a blitz interview with Dmitry Zavorotny, Head of the Center for Economic Strategies (Russia).
- What can a possible total oil and gas embargo against Russia lead to? And how can this affect Azerbaijan?
- A total oil and gas embargo is unlikely, at least within a few years. Gas is already becoming a subject of compromise. Recently, it was decided to carry out settlements on gas contracts through the National Clearing Center, which is a structure of the Moscow Exchange. The plan is likely to suit European traders because the clearing centre independently converts currency into roubles and is not linked to the Central Bank, which means that the sanctions' regime is not violated.
In case of a full-fledged embargo, oil prices will rise and Azerbaijan, as well as other exporting countries, can earn extra money on surges in quotations. On the other hand, it will not be possible to replace the falling out volumes of Russian oil on the European market because Azerbaijan exports "Azeri" light grade oil, and in case of the embargo on Russian oil in Europe there will be a shortage of heavy oil needed for diesel production.
- What are the alternatives to Russian oil? Can the Middle East save Europe?
- The question of replacing Russian oil, again, is in terms of grades. The Middle East also predominantly supplies light oil. In addition to Russia, Canada, Venezuela, and Iran produce heavy oil. Canada sells its oil to the US, Venezuela is now working for China, and if sanctions are lifted will return to the US market. Iran could become a supplier to the EU, but this would require a renewal of the Iranian nuclear deal and the lifting of sanctions. The issue of oil substitution cannot be resolved quickly and Europe will probably leave some workarounds for Russian oil.
- New sanctions require the agreement of all 27 EU member states. Will they be able to reach a unanimous decision?
- There is no unanimity on the embargo. Hungary resists because it is landlocked and gets most of its supplies through the Druzhba pipeline from Russia, so it demands to keep this line. The main intrigue is whether the European Commission will be able to persuade Budapest to the embargo, and what Hungary will demand in return to the case of a compromise.
- What will happen in this case with the oil sold by Azerbaijan from the Russian Black Sea port of Novorossiysk through the Baku-Novorossiysk pipeline?
- In the case of a total embargo, this route can have serious problems because Baku-Novorossiysk near the town of Tikhoretsk is linked with the Samara-Novorossiysk pipeline, and the oil is mixed with high-sulfur oil of the Volga region and gets to the European market under the Urals brand. That is, in fact, it is identified as oil of Russian origin.
Azerbaijani FM to visit Iran
02 July 2022 - 12:45
Armenian PM promotes his candidates to key positions in parliament
02 July 2022 - 12:31
SOCAR Energy Switzerland becomes Switzerland's biggest energy company PHOTO
02 July 2022 - 12:20
ANAMA conducts mine awareness training in Zangilan's Aghali village
02 July 2022 - 12:01
Turkmenistan, Türkiye sign bilateral agreements
02 July 2022 - 12:00
Ukraine: Russia changes tactics in war
02 July 2022 - 11:41
Participants of Baku Conference of NAM Parliamentary Network visit Karabakh PHOTO
02 July 2022 - 11:41
Nato summit in Madrid for hawks
02 July 2022 - 11:34
Total of 344 children die in Ukraine since start of Russia's invasion
02 July 2022 - 11:27
"Leaving a peacekeeping contingent in Karabakh for a long time is not a great joy for Russia" Vladimir Kireev for Caliber.Az
02 July 2022 - 11:20
UK intelligence on missiles used by Russia firing at Ukrainian cities
02 July 2022 - 11:09
Ukraine unveils Russian troops losses
02 July 2022 - 10:53
Azerbaijani national basketball team reaches European Championship semi-finals
02 July 2022 - 10:27
Albania talks with NATO to build naval base in the Adriatic
02 July 2022 - 10:25
WHO calls for urgent response to monkeypox
02 July 2022 - 10:23
Another opposition rally to be held in Yerevan on July 8
02 July 2022 - 10:14
Coalition of 35 nations backs sporting sanctions against Russia and Belarus
02 July 2022 - 10:12
NATO ex-chief admits possibility of war between Alliance and Russia
02 July 2022 - 10:04
Five killed as strong earthquake jolts Iran
02 July 2022 - 10:03
Pentagon comments on reasons for Russian troops' retreat from Snake Island
02 July 2022 - 09:47
Head of Security Councils of Turkic States meet in Türkiye PHOTO
02 July 2022 - 09:46
Russia quits several Council of Europe agreements
02 July 2022 - 09:30
Former NATO secretary general to develop security guarantees for Ukraine
02 July 2022 - 09:23
Norway pledges €1 billion to support Ukraine
02 July 2022 - 09:22
Armenian opposition holding rally in Yerevan
02 July 2022 - 09:07
Azerbaijan’s middle power credentials augmented NAM: Greater global reach and tangible support
02 July 2022 - 09:00
Azerbaijan to provide monthly financial assistance to 39 news websites PHOTO
02 July 2022 - 08:35
UK signs important deal with New Zealand in huge step to becoming "science superpower"
02 July 2022 - 07:31
Zuckerberg could use Metaverse to brainwash world’s population Expert warns
02 July 2022 - 06:29
Inventor of mobile phone says people need to "get a life"
02 July 2022 - 05:31
FBI adds "Cryptoqueen" to ten most wanted list
02 July 2022 - 04:20
North Korea blames Covid-19 outbreak on "unusual items" near South Korea border
02 July 2022 - 03:33
Chip stocks fall as Micron outlook signals easing demand
02 July 2022 - 02:28
Foreign experts to gather in Baku to discuss fluctuations in level of Caspian Sea
02 July 2022 - 01:31
Poland buys 32 helicopters from Italy's Leonardo
02 July 2022 - 00:30