The conclusion about the beneficial effect of sanctions for Russia has been called into question

“The threat of shortages arises for everyone”

Western sanctions on Russian oil products that came into force in February are bringing more and more benefits to Moscow, writes the British Financial Times. On the one hand, the situation with diesel fuel supplies to Europe and the USA has become noticeably more complicated. On the other hand, its refining margin has doubled since July 2023 and is now $40 per barrel. We are talking about the price difference between diesel fuel and other types of fuel, as well as oil.

When last year the West conceived an embargo on the supply of Russian oil products by sea, it did not see a serious threat to itself in this sanctions step. Meanwhile, the negative consequences eventually manifested themselves: due to the refusal of Russian diesel, diesel production at European refineries fell. According to Rystad Energy, even before the start of the CBO, European refiners were producing more gasoline than diesel fuel, traditionally used for heating homes. Since they preferred to buy heavy oil (diesel) from the Russian Federation. Today, its reserves in Europe are declining, and local refineries have limited capacity.

“In fact, diesel reserves in Europe are dwindling, and local refineries are physically unable to sharply increase volumes to the required levels,” says Artem Deev, head of the analytical department at AMarkets. – And on the eve of winter, the issue of fuel will become especially important. Russia remains one of the main suppliers of diesel fuel to the world market: about 20% of the total volume transported by sea is ours. It is also appropriate to remember that diesel cars are more popular in Europe. Accordingly, the crisis may hit not only the housing and communal services sector, but also the price tags at gas stations.”

For Russian traders, the situation looks encouraging and in the future may bring additional windfall income to our budget. However, Deev reminds, a significant share of Russian fuel is now entering the market through gray schemes: through Turkey, North Africa and the Middle East. That is, there will definitely not be a total shortage of diesel in Europe – you will just have to pay significantly more for it. And part of this margin will remain in the laying countries.

“I would refrain from concluding that sanctions are increasingly playing into Moscow’s hands,” says Nikita Maslennikov, a leading expert at the Center for Political Technologies. – Sanctions are a double-edged weapon. When price ceilings and embargoes are introduced (on oil or petroleum products, it doesn’t matter), sooner or later this results in a shortage for everyone. When making these decisions at the time, the West clearly did not calculate all the consequences. However, the current fuel price crisis in the Russian Federation was the result of erroneous measures, this time on the part of local exporters. It is no secret that Turkey actively buys our gasoline – Russia accounts for more than 80% of the petroleum products it imports. It sends this gasoline to the domestic market, and sells what it produces at its own refineries to Europe. The temptation into which Russian exporters fell amid sanctions, increasing supplies to Turkey and exposing the domestic market, backfired on our country.”