MOSCOW, December 6. /TASS/. The embargo on Russian oil import since December 5 and the approved oil price cap put the European Union to the period of high uncertainty, chief executive of the InfoTEK Rustam Tankaev said in his article.
The embargo on seaborne supplies of Russian oil to EU countries became effective on December 5. The EU countries also introduced the adjustable price cap for Russian oil supplied by sea at the level of $60 a barrel. The Group of Seven member-states and Australia made a similar decision.
Europe is entering the period of high uncertainty, aggravated by the difference between political slogans of the US administration and actual capabilities of US oil and gas companies, the expert said. "The United States repeatedly promised to boost oil and gas deliveries, substituting a portion of imports from Russia. However, the US does not have surplus oil and gas to cover the European deficit," Tankaev said. The US can just theoretically substitute Russian oil supplies and only in case of a complete export ban for other destinations, he noted.
The European Union is the largest net importer of crude oil and petroleum products globally, with the import dependence more than 90%. To close its oil balance, the EU is to import about 500 mln metric tons of oil and petroleum products annually, Tankaev said. This totals about 25% of global international trade in such commodities and Russia provided a quarter of this volume.
As regards natural gas, the EU is the main gas importer worldwide with the growing deficit to 342.98 bln cubic meters in 2020. In 2021, gas production in the EU dropped to 44 bln cubic meters and consumption moved up to about 405 bln cubic meters. Accordingly, net gas import in the EU stood at about 361 bln cubic meters in 2021, which is 29.6% of total international gas trade.
Capacities available in the US for liquefied natural gas production will not be enough to substitute Russian gas, even considering the demand contraction in the EU by 40-50 bln cubic meters per year, Tankaev said. "Even if the theoretical possibility to completely substitute Russian gas in the European Union will appear by 2025, it will be required to fully redirect US supplies to Europe, exposing other markets. This is unfeasible, considering contractual commitments of certain companies and lack of instruments to manage export flows with the US administration," the expert said. The European Union will also need to always have higher prices than on Asia-Pacific markets to bring the US gas to Europe, he added.