The CEO of Vitol forecasted that Russia won’t be able to shield itself as effectively from Western sanctions.
He predicted Russia’s exports could drop as much as 1 million barrels per day this winter, despite “dark fleets” of tankers.
Russian oil exports have held up this year, with nations like India and China stepping up purchases.
Russia’s oil exports are going to tumble this winter despite Moscow’s growing “dark fleet” of tankers, according to Russell Hardy, chief executive officer of Vitol, the world’s largest independent energy trader.
While Russia’s crude exports have proved resilient through 2022, that could change soon, with upwards of a million barrels per day going offline, Hardy forecasted.
“The expectation is that nearly all European companies will turn their back on business that is not compliant,” Hardy said in an interview with the Financial Times. “We think [Russia’s] logistical solutions are growing, they’re eating away at the problem. But whether or not they’ve eaten away at the whole problem we don’t know.”
China and India this year have ramped up imports of Russian oil, stepping in as big buyers of supplies as Western nations turn away from doing business with Moscow. Vitol, for example, used to be one of the largest carriers of Russian oil but said it has since halted working with companies like Russia’s Rosneft.
Russia, however, could turn to a fleet of smaller vessels to make oil deliveries, Hardy said, as the larger tankers become banned from certain ports. More ship-to-ship transfers and other furtive exchanges could also emerge with the onset of fresh European Union sanctions.
An analyst from Norway’s SEB estimated that Russia’s existing “dark fleet” totaled about 270 ships, according to the Financial Times, and the expert said Russian crude flows will face disruptions moving forward.
To Hardy, Russia will be “under the gun to find a solution” as sanctions set in and a price cap proposal comes to fruition.
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