The conflict between Russia and Ukraine continues, and the international energy pattern has undergone drastic changes

Editor's Note: It has been nearly a month since Russia launched a special military operation against Ukraine on February 24, and the structure of the international energy sector has been profoundly affected
.
As one of the world's largest energy exporters, Russia will trade
energy with more than 30 countries in 2021.
With the Western sanctions against Russia in many areas, the role of Russia, the United States and the Gulf states in global energy trade is changing
.

Russian energy is brewing a "big turn" to reduce sanctions losses

"There are differences
within the EU on whether to join the United States and impose an oil embargo on Russia.
" Reuters said that on the 21st local time, EU member states held a meeting of foreign ministers at the EU headquarters in Brussels, Belgium, and finally failed to reach a consensus
on the implementation of an energy embargo on Russia.
International oil prices rose more than 7 percent that day, returning above $110 a barrel
.
The U.
S.
WTI crude oil futures for final April deliveries closed at $112.
12 a barrel, or 7.
09%; Brent crude for May deliveries was quoted at $116.
68 a barrel, an increase of 8.
11%.

A March 22 report by Russian television quoted experts from Russian TotalResearch as saying that all refineries in Eastern and Central Europe can only technically use Russian oil, and that oil in the United States or the Middle East is different from Russian oil composition, and these plants must be modernized to be usable, and at current electricity and fuel prices, Europe simply cannot afford it
.

According to the General Customs Service of the Russian Federation, Russia will export nearly 230 million tons of crude oil in 2021 to 36 countries in the
world.
China has been the biggest buyer
of Russian oil since 2017.
In 2021, China bought 70.
1 million tons of oil from Russia, accounting for about 30%
of Russia's total exports.
The Netherlands and Germany ranked second and third
.

Overall, EU countries account for 47%
of Russian oil deliveries.
In 2021, Russia's pipeline natural gas exports will be 203.
5 billion cubic meters, worth about 55.
5 billion US dollars, of which 48.
2 billion cubic meters will be supplied to Germany, ranking first
.
At the same time, Russia exports 66.
1 million cubic meters of liquefied natural gas, supplying 22 countries
.
The top three buyers are Japan (12.
8 million cubic meters), China (11.
4 million cubic meters) and France (10.
4 million cubic meters).

"If the West imposes an embargo on Russian energy imports, world oil prices will rise to $
300 per barrel.
" Russian News Agency reported on the 21st that for the EU to discuss banning the import of Russian oil, Russian Deputy Prime Minister Novak said that Russia will diversify its oil exports, and Rosneft is already studying this issue
.
He said that despite the pressure of sanctions, Russia's oil and gas production is still in full swing, and "Russia exports 8 million barrels of oil
per day.
" We will continue to ensure the supply of
energy resources.
”

"Due to Europe's attempt to refuse to buy energy from Russia, Russia found a European alternative in the oil market" Russia Today TV reported on the 21st that Russia's oil exports to India, the world's third largest energy consumer, quadrupled in March, which is a sign
that Russia's energy supply direction is being reshaped.
Russia has shipped 360,000 barrels of oil a day to India since March, four times
the 2021 average.
White House press secretary Pusaki had warned that India's purchase of Russian oil was "doing the wrong thing" but acknowledged that the move did not violate U.
S.
sanctions
.

Vivikanand Subalamán, an analyst at AmbitCapital in India, said India had not previously bought much oil
from Russia given the high cost of transportation.
Now the situation is changing, Russian Ural oil attracts customers
in Asia at preferential prices.
State-owned refiners Hindustan Petroleum, Indian Oil and privately held Nayara Energy bought a total of 7 million barrels of Russian oil
in the third week of March.

The Times of India, citing sources, reported that Indian Oil bought 3 million barrels of Russian Urals crude for May delivery through European commodity trader Vitol, which is $20-25 per barrel cheaper than the price of Brent crude
.
Hindustan Oil Company bought 2 million barrels of Ural crude
.
Meanwhile, India's Mangalore Refinery and Petrochemicals Ltd also announced a tender for the supply of 1 million barrels of crude oil
.

At the same time, to boost trade, India and Russia are considering switching to rubles and rupees for oil trade instead of the dollar
.
Yushkov, an expert at Russia's National Energy Security Fund, said that a large amount of Russian oil originally destined for the United States is diverting to India
.
Although Europe has not officially banned the import of Russian oil, due to risk concerns, European buyers have significantly reduced
the number of Russian oil purchased on the spot market.
Russian experts predict that the redistribution of the world's energy flow is inevitable
.
Saudi Arabia has replaced Russia
in the U.
S.
energy market.

But Russian experts say there are also disadvantages to Russia's energy exports shifting to
Asia.
A discount of $20 to $30 per barrel of Ural crude oil will cost Russian exports 300 billion rubles
.
Before Western sanctions, the main buyers of Russian oil were the United States, EU countries, China, India and the United Kingdom
.
Kondradyev, an expert at the Russian Institute of Energy and Finance, said that in early 2022, the United States bought about 700,000 barrels of Russian oil per day, but imports fell to 400,000 barrels
in February.
The UK buys about 120,000 barrels a day from Russia and the EU buys about 3 million barrels
.

Gulf countries oil and gas exports riding the "east wind"?

"The Russian-Ukrainian conflict continues, and the structure of the international energy plate is undergoing profound changes
.
" Egypt's "Financial News" recently wrote an
article.
The spillover effect of international geopolitics is becoming more and more obvious, oil and other energy prices are gradually pushed up, and the oil price of more than $100 per barrel makes the oil-rich Saudi Arabia, the United Arab Emirates, Qatar and other Gulf countries "hold oil and self-respect", while making a lot of money, their own status and role as an energy power have been highlighted
.

According to Middle East media reports, in recent days, politicians from Germany, Britain and Japan have visited the Middle East, and an important purpose is to "find oil", persuade oil-producing countries to expand production capacity, and hedge the huge pressure
caused by high oil prices on the economies of oil-importing countries.
German Deputy Chancellor and Minister of Economy and Climate Protection Habek led more than 20 business representatives to visit Qatar, the United Arab Emirates and other Gulf countries
on the 19th.
"As Germany tries to reduce its heavy dependence on Russian oil and gas, the visit aims to secure its future energy supply.
"
Middle East media
commented.

Habeck said on the 20th in Doha, the capital of Qatar, that it has reached a long-term natural gas procurement partnership
with the country.
Germany has pledged to build two LNG terminals on its North Sea coast to receive large quantities of gas
from exporters such as Qatar and the United States.
Japan's Ministry of Foreign Affairs said on the 20th that Japanese Foreign Minister Lin Fangzheng issued a statement after meeting with Abu Dhabi National Petroleum Corporation CEO Jaber that "I hope that the UAE will contribute to the stability of the global oil market by further supplying oil and ensuring production capacity.
"
Earlier, British Prime Minister Johnson also talked about energy supply during a visit to the UAE and Saudi Arabia
.

Saudi National Oil Company (Aramco) said on the 20th that it will invest in increasing oil production and increasing oil production expenditure to meet growing global demand, and plans to increase the "maximum sustainable capacity" of crude oil to 13 million barrels
per day by 2027.
Middle Eastern media said Saudi Arabia and the UAE transported more than 13 million barrels of oil per day, making it "one of the few oil producers with a lot of spare capacity.
"

According to the Saudi economic newspaper, OPEC will hold a meeting on March 31 and is expected to commit to adding an additional 400,000 barrels of crude oil supply
to the global market every month.
But traders and analysts in Western countries say the increase is too small to lower oil prices
.

Grabbing the market, the US energy industry has strongly increased production

When Russia's energy trade is blocked, the United States, which is also a major energy producer, has become the focus
of international markets.
"The number of U.
S.
oil rigs has grown by about 20 percent in the last six months, but mostly to make up for the lack
of pre-pandemic rigs.
Don't expect a big increase in production right away
.
The U.
S.
"Wall Street Journal" reported on the 21st that after the Biden administration called for increasing domestic crude oil production and striving to stabilize rising oil prices, U.
S.
shale oil executives admitted that they faced multiple production bottlenecks, including supply chain problems, cautious investors and remaining drilling inventory restrictions
.
The US National Public Radio (NPR) website analyzed on the 19th that before the international oil price continued to decline and market demand was weak, many oil and gas production companies sharply reduced production input, and production capacity fell
compared with the original.
At the same time, due to the impact of the new crown epidemic, the overall supply chain in the United States is tight and unbalanced, and it is difficult for the oil and gas industry to immediately increase production capacity
.

However, some analysts say that the determination of the United States to increase crude oil production will not be easily changed
.
The United States is currently the world's largest producer of crude oil
.
In the long run, the oil and gas in the United States is mainly shale resources, and the development cost is relatively high
.
With the increase in international oil prices, the development of shale oil and gas resources in the United States, especially the enthusiasm of independent manufacturers to expand production, is increasing
.
According to the Nihon Keizai Shimbun, the U.
S.
Energy Information Administration estimates that U.
S.
crude oil production is expected to reach about 12.
64 million bpd
in December 2022.
Most of the increase is shale oil, which is expected to increase by more than 1 million barrels per day from February, equivalent to about 20% of Russian crude oil exports
.
Production will reach around 12.
97 million bpd by July 2023, surpassing the historical peak of November
2019.
At the same time, money is flowing in
.
iShares Global Energy ETF, an exchange-traded fund (ETF) made up of oil concept stocks, rose more than 20% from the beginning of the
year.

The U.
S.
government is also supporting the expansion
of LNG export facilities.
U.
S.
LNG exports to the European market have risen significantly since last year, and Nihon Keizai Shimbun said that about 60% of U.
S.
LNG exports were sold to Europe
in January this year.
The U.
S.
Energy Information Administration predicts that the U.
S.
will become the world's largest exporter
of liquefied natural gas this year.