A second shipment of crude from a U.S. The Gulf of Mexico offshore field has sailed for Germany, according to vessel tracking data and trade sources on Tuesday, as European refiners test potential replacements for Russian oil, says an article published in Reuters.
Cutting Imports
Europe is aiming to cut 90% of its Russian oil imports by the end of this year.
Refiners are expected to look to Norway, the Middle East, the United States and West Africa for alternative supplies, according to analysts.
The Hunt For Substitution
The hunt for substitutes has led in two recent instances to Mars, a U.S. sour grade similar to Russia’s Urals.
The Ise Princess tanker loaded Mars Sour crude off the Louisiana coast and is on its way to the Baltic Sea port of Rostock, Germany, according to Refinitiv Eikon ship tracking and sources.
Mars Crude
The second ship of Mars crude in a month is carrying about 570,000 barrels and due in Rostock Aug. 30, shipping data showed.
Shell (SHEL.L), which operates the oilfield that produces Mars crude, declined to comment.
The Pipeline
Rostock connects via pipeline to two northern Germany oil refineries – PCK in Schwedt and TotalEnergies (TTEF.PA) in Leuna.
The first tanker of Mars sour crude discharged in Rostock earlier this month for the 233,000 barrel-per-day PCK Schwedt refinery majority-owned by Russian state firm Rosneft (ROSN.MM), with Shell and Eni (ENI.MI) holding minority stakes.
A Jump In Fuel Prices
Rosneft last week warned that fuel prices in Germany would likely jump if PCK replaces Russian oil with more expensive, seaborne non-Russian barrels. It did not reply to a request for a comment this week.
Russia’s Main Crude
Both PCK’s Schwedt and TotalEnergies’ Leuna refineries have received Russia’s main crude grade, medium sour Urals, through the Druzbha pipeline in compliance with EU sanctions.
Distillates Fuels
Grades like Mars tend to produce more distillate fuels such as diesel, jet fuel and gasoil, than gasoline. Germany depends on Russia as a major source of diesel.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Reuters
