Russian supplies will fall by 2 million barrels a day under sanctions

International sanctions on Russian crude will cut the supply of 2 million barrels per day of crude, predicted Windward AI CEO and co-founder Ami Daniel.

“Russia and China will have their own distribution network, but I think a few million bpd could die because of these sanctions. There will be no physical way to transport it,” Daniel said.

The United States and the European Union were the first to attack Russia’s ability to profit from its natural resource exports. Japan’s role is less clear.

“We don’t really know where Japan is at,” Daniel said. It’s hard to predict what the country might choose to do, but with the economy in bad shape, the government is feeling the pressure, the CEO said.

“It’s a tougher call for them and Russia is not an existential threat,” he continued. Whereas for Europe, and in particular Germany, “Russia is an existential threat. They cannot back down.

Enforcement

Enforcement of sanctions will be crucial. Western authorities are taking steps to require shippers to prove they are not carrying Russian oil. “If you can’t prove to your service providers, you go under the price cap,” Daniel said.

A violation of paying $1 above the price cap would then mean, for example, that the shipper would be cut off from pilotage, refueling and storage services.

Sanctions will push China and Russia to expand their own shipping lines, Windward’s CEO said. Such a decision will put pressure on the tanker fleet.

“Tankers will be doing longer trips, which increases ton-miles, which means there’s more demand for tankers,” he said.

Amid the new challenges facing global energy supplies, Daniel noted the growing importance of energy security talks, relative to reducing carbon emissions.

“At Adipec, I heard that energy security was important and that we needed nuclear, hydrogen and hydrocarbons – I did not hear reducing fossil fuels,” he said. declared.

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