Tag Archives: sanctions

Chinese Foreign Ministry Expresses Dissatisfaction with US Attempts to Impose Sanctions against Russian Oil Supplies to China

July 27 2022  

The Chinese authorities are categorically against attempts by the United States to impose unilateral sanctions on Russian oil supplies to China. This was announced on Wednesday by Chinese Foreign Ministry spokesman Zhao Lijian.

“China is categorically against such illegal unilateral sanctions,” he said at a briefing, answering a question from TASS about how the PRC authorities feel about such plans by the United States. “China and Russia carry out normal trade and economic cooperation on the principles of equality, mutual benefit and mutual respect “.

As the Chinese diplomat clarified, Beijing’s cooperation with Moscow is not aimed against anyone. “We will also not tolerate external interference,” Zhao Lijian stressed.

As Bloomberg reported earlier, US senators led by Marco Rubio (R-Fla.) have proposed sanctions against companies involved in the sale of Russian oil and other energy resources to China. The bill provides for penalties for any organization that insures or registers tankers that transport oil or liquefied natural gas from Russia to China.

Editorial comment. Playing with fire. It is clear that Republican Senator Marco Rubio and his colleagues are primarily pursuing the goals of the election campaign and would like to embarrass the Democratic administration by accusing it of “insufficient” toughness towards Russia and, at the same time, ignite the fire of a trade war with China, which Donald Trump failed to accomplish fully. However, the absurdity of dictating whom, from whom and for how much to buy is so obvious that the US executive branch will hardly dare to subscribe to the initiative of the Rubio group.

Source: https://portnews.ru/digest/23246/

Russian Contracts Portfolio of South Korean Shipyards Exceeds $8 Billion

The loss of these contracts may affect the financial position of enterprises

July 26, 2022  

The three largest shipyards in South Korea expect to receive significant profits next year from the execution of shipbuilding contracts with customers from the Russian Federation. Samsung Heavy Industries, Daewoo Shipbuilding & Marine Engineering (DSME) and Hyundai Samho Heavy Industries received orders worth $5 billion, $2.5 billion and $550 million, respectively, according to Business Korea. However, due to the current economic sanctions against Russia, any delay in the tranche may lead to a shift in the construction schedule.

The construction schedule for 2022 at South Korean shipyards has already been completed by 70%, but, according to the publication, this year the companies will remain in the “red”. This is because shipbuilding projects have been going on for about 10 years, and steel prices are rising rapidly.

The sum of the Hyundai Samho contract for the construction of one LNG tanker for Russian shipowner is less than that of the other two shipbuilders, so it is not so tangible. In addition, in case of termination of the contract, such a vessel can be easily sold to another shipowner.

SHI and DSME have received large orders for the construction of Arc 7 class LNG tankers, and if contracts are terminated, the sale of this class of vessels may be difficult. DSME has already been notified of the cancellation of orders for two vessels.

Source: https://portnews.ru/news/332890/ 

Editorial Comment: The authors of the article are a little cunning in the last sentence. Not “DSME has already been notified”, but DSME itself has notified the successive termination of contracts with Sovcomflot for two LNG carriers due to delays in the receipt of funds within the contractual terms. However, it is known that the reason for the delay is the accession of South Korea to anti-Russian sanctions in the financial sector, which created technical difficulties with the transfer of money to Korea. Significantly, the decision to join the sanctions was made by outgoing President Moon Jae-in, possibly to harm the opposition leader who won the election. Let us also recall that when a similar problem related to the technique of transferring funds under contracts for payment for Russian gas faced the EU countries, a solution was found quickly. In this particular case, the Republic of Korea will lose a lot, in exchange for receiving, at best, only an encouraging pat on the back from Washington.

Logistics companies have found a way to circumvent EU sanctions

April 12 2022

The situation with the introduction of the fifth package of sanctions by the European Union worried logistics companies involved in import-export operations, but the situation is not too catastrophic, since the share of Russian and Belarusian carriers in the market for transportation from Russia to Europe and back was about 30%. Alexei Misailov, Business Development Director of “FM Logistic” in Russia, announced this on April 12 to REGNUM news agency. At the same time, according to him, even this share played a significant role, primarily in export shipments, and now many companies are looking for alternative options for maintaining existing routes.

“Currently, the use of transit countries (for example, Turkey, which, however, is longer and more expensive), is being considered, but the optimal solution seems to be one that would allow changing tractors at the border of Russia, Belarus and Europe. Legislatively, it is still possible and this measure will help to avoid a crisis in road freight traffic between Russia and the European Union,” the expert explained.

According to his estimates, it will take about two weeks to establish such seamless solutions between European, Russian and Belarusian carriers. In this case, the increase in delivery time will not exceed more than one day.

“Against the background of many days (4-5 days) of downtime at the borders awaiting inspection, this looks more than a compromise option. As for the cost of transportation, it can grow by 300-400 euros due to the use of border terminals for re-coupling trailers to new tractors,” Misailov added.

Recall that the EU stopped the passage of vehicles registered in Russia and Belarus from April 8.

Source: https://portnews.ru/digest/23116/

Will Russian oil go to Asia?

March 25 2022

The US has imposed an embargo on Russian oil imports. Deliveries to the EU countries in the near future are under a big question. However, Russian exports to other destinations have already started to grow. For example, this week Indian Nayara Energy oil refiner acquired Russian oil after a year-long hiatus, having bought about 1.8 million barrels of Urals oil from Trafigura trader.

Apparently, the countries that have not imposed sanctions against Russia will buy more of its oil. The obvious options for increasing flows are China and India. However, such a solution would require China to be ready to enter into the conflict with Western countries. The alternative is India, which is already increasing purchases of Russian oil. However, when supply flows change, inevitable difficulties will arise due to the limited capacity of the Eastern Siberia-Pacific Ocean oil pipeline and a significant increase in the cost of freight for transportation from ports in the European part of Russia. The redirection of Russian oil supplies from Europe to the Asia-Pacific region will double the average delivery time (from 15 to about 30 days), which will increase the need for tankers. The Russian fleet is able to independently provide only about a third of the sea transportation of oil and oil products. Russian tankers are more suitable for the transportation of crude oil. As for petroleum products, its fleet can transport only 17% of total exports. Due to the fact that Russian refineries are located mainly in the European part of the country, transporting oil products by tankers is more expensive than transporting crude oil, and therefore it is more difficult to redirect gasoline and fuel oil to Asian markets.

The search for new markets in this case will not be a problem: the most significant increase in demand for crude oil in the coming years is expected in Asia, primarily in China and the developing countries of the region. However, it will take some time to reorient the Russian oil industry to the east. In the short term the conclusion of new supply contracts, solving logistics issues and chartering tankers is expected, in the longer term, the implementation of new pipeline projects is considered. 

Source: PortNews.ru