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Russian oil supplies to Europe will not go down in summer, experts say

According to the analysts of the Center of Energy Development, the situation can change dramatically in fall, especially if oil prices plunge

MOSCOW, June 3. /TASS/. Russian crude oil supplies to Europe will not actually decline in summer. Russian companies will be able to redirect shortfalls in volumes to Asia, analysts of the Center of Energy Development said.

"We expect deliveries to the EU will not actually contract throughout summer," the Center said in its May report. It will be difficult for European refineries to find a replacement for the Russian Urals blend in the summer season and at current high prices, analysts noted. "We believe Russian oil companies will be able to redirect almost all shortfalls in volumes on the European market to Asia right until October, and the EU embargo effect on shipments will be insignificant or even zero," according to the report. Seaborne oil deliveries to the EU account for about 1.4 mln barrels daily from 2.1 mln barrels of the total Russian oil export to Europe.

The situation can change dramatically in fall, especially if oil prices plunge, experts say. "Nevertheless, we believe Russian companies will be struggle for the market share and will not reduce export significantly, especially that it remains extremely lucrative even subject to the current Urals discount against Brent totaling $34 per barrel on the European market and $6-7 per barrel in Asia," as indicated in the report.

Termination of insurance for tankers of Russian oil by the EU since December can be a more serious challenge because Russia will have to seek alternatives in China or create a Russian insurance company for such goals, as it was done for reinsurance of Russian aircraft produced abroad, experts added.