Sanctions imposed by Europe and the United States will make the flow of Russian oil to Asia and the Middle East even worse

Executives at energy company and commodities trader Vitol said the oil market is bracing for the biggest shift in global trade flows in history, as nearly 3 million barrels per day of Russian crude oil and products will have to be diverted to markets outside Europe and advanced economies in the coming months after EU sanctions come into effect
.

The European Union will ban imports of Russian crude until December 5 and Russian oil products until February 5, which will deprive Russia of oil revenues and force one of the world's largest oil producers and exporters to look for other markets
.
The U.
S.
-led Group of Seven (G7) plan to keep Russian oil accessible and minimize
the impact of supply disruptions that could lead to price spikes by setting a price cap on Russian oil exports.

Russell Hardy, CEO of Victor Group, said Russian oil would be diverted to Asia and the Middle East due to changes in trade flows, while Asian oil would be exported to Europe
.
Giovanni Serio, head of global research at Vitol Group, said at the 2022 APPEC meeting that about 2 million barrels of crude oil and 1 million barrels of petroleum products per day in Russia must be shipped elsewhere, putting pressure
on the shipping sector.

Serio noted that the average voyage of Russian oil exports to Europe is about 7 days, and if exported to Asia it is 21 days, which is three times its voyage; This equates to an increase in shipping activity in tonne-miles of nearly 3 percent
.
Tonne-miles are defined as one ton of cargo transported per mile, reflecting the quantity and distance
transported.
A key challenge for trading companies will be the shortage
of small Aframax ships needed to transport Russian oil, he said.
Serio pointed out: "There are already a lot of people who want to switch the Aframax ship type to a very large crude oil carrier, because the very large crude oil carrier will have a larger
cargo volume.
"

Secondly, he added, the bottleneck has been exacerbated by sanctions, which affect European shipping companies, insurance companies and financial service providers by preventing them
from participating in Russia's oil trade to other regions.
Sergio said that if Russian oil cannot be transferred elsewhere due to micro and macro constraints, such as some countries finding it "politically unacceptable" to buy Russian oil, then the world will have to deal with reduced supply
.

Triharyo Soesilo, special adviser to Indonesia's energy and mineral resources minister, said Indonesia's state-owned energy giant Pertamina is still assessing the technical details
of whether Russian crude is suitable for its refining system and payment mechanism.
The company is considering buying Russian crude.

"There are plans to address these technical issues, which are ongoing, but not yet decided
," he said.

Indonesia's energy minister has previously said the government is willing to buy cheap oil from any country, but has not yet bought Russian oil because "these commodities are not available.
"