Kpler’s View: Heavier Barrels Remain Robust in Medium-Term

US appetite for heavier barrels to remain robust in the medium-term, says Johannes Rauball, crude analyst at Kpler   Western refineries were largely able to circumvent the effects of EU sanctions on Russian oil relatively smoothly and adapt to the reshuffling of global trade flows over the last year. However, its impact can still be felt today, particularly across medium and heavy crude markets. In fact, European refiners have become increasingly dependent on imports of heavier barrels from Latin America and the Middle East, which have now replaced those that had previously come from Russia. This has, however, made Europe vulnerable to supply outages and production cuts by OPEC+, with India and China reaping the benefits of heavily discounted Russian oil, which has been flowing toward Asia in record amounts. Impacts of the Russia-Ukraine War Prior to the Russia-Ukraine war, Europe imported some 1.9 Mbd of crude and condensate from Russia, with Russia’s medium-sour benchmark, Urals, accounting for 70%, or 1.4 Mbd of this total (Kpler). Given the latter grade’s qualities (API gravity of 31.0° and sulfur content of 2.0%), the crude yields slightly higher amounts of...