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Saudi Arabia and Iraq are helping Europe wean off of Russian crude, which is increasingly headed to Asia, as Vladimir Putin’s war on Ukraine reshuffles the global energy market.
Europe has imported more than 1 million barrels per day via the SuMed pipeline in the first three weeks of July, nearly double from a year ago, according to shipping data compiled by Bloomberg. The volumes in the pipeline, which transits through Egypt, are mostly Saudi oil but also include Iraqi crude.
In addition, ships carrying another 1.2 million barrels a day from the Persian Gulf, mostly from Iraq, have gone through the Suez Canal to Europe during the first three weeks of July, Bloomberg reported.
That means oil deliveries via pipeline and ship from the Middle East to Europe total 2.2 million barrels a day, up nearly 90% since January.
Meanwhile, Russia is shipping its crude to Asia, specifically China and India. Russia is currently China’s top-supplier of crude.
And as Saudi Arabia diverts more of its crude oil exports to Europe, it is sending less to top customers in Asia. In fact, China’s imports of Saudi crude in June were down 30% compared to year-ago levels.
But the shift in oil trade patterns could be further disrupted later this year as European sanctions on Russian oil are phased in. The sanctions package includes a ban on shipping and insurance services, which could prevent Russia from exporting oil to countries outside Europe and increase competition for supplies from the Middle East.
