Why does America buy oil from Russia
The Americans began to buy even larger volumes of Russian oil and fuel oil for the production of gasoline. Deliveries have peaked in ten years, the US Department of Energy calculated. How did it happen that Washington is increasing its oil purchases from one of its main geopolitical opponents?
The purchase of Russian oil is clearly at odds with the US energy doctrine, but the Americans continue to buy it, and more and more every year. Last year, imports of oil and petroleum products from Russia to the United States reached a maximum since 2011, according to the US Department of Energy. On average, in 2020, Americans bought 538 thousand barrels per day from Russia. As a result, Russia became the second importer of oil and oil products to the United States in terms of supplies, pushing Saudi Arabia to the third place (538 thousand against 514 thousand barrels per day).
The first, as always, is held by neighboring Canada. There, the Americans buy 3.2 million barrels per day (minus 5.4% compared to 2019).
The Americans began to increase imports of Russian raw materials in 2019 - in April of that year, the figure exceeded 500 thousand barrels per day. Last year, the volume of supplies in May-June fell due to strong restrictions on oil production under the OPEC + agreement. But in July, the Americans again began to purchase more than 500 thousand barrels per day from Russia. As a result, over several years, the share of Russian oil in the total import of black gold increased from 0.5% to 7% in 2020.
Why do Americans buy Russian oil and oil products? Is there no one else? It turns out that there really is no one else. Moreover, the United States has driven itself into this geopolitical trap.
“The main reason is clear. Trump imposed tough sanctions on Venezuela, and a shortage of heavy oil arose at American refineries. Russia took advantage of this deficit. The market is global, traders are taken to where they can sell profitably, ”says Konstantin Simonov, head of the National Energy Security Fund.
As a result, a paradoxical situation has developed, both economically and politically.
On the one hand, the United States has long ceased to be a major oil importer. On the contrary, they began to produce their own shale light oil and were able to become a major oil producer and exporter in the world. On the other hand, they continue to depend on the import of heavy oil, which the political opponent, Russia, has.
“This is due to the economics of US refineries, which have higher margins when refining heavy oil. This is how an independent oil refinery is built in the United States, ”explains Simonov. It is more profitable for the Americans to export their own light oil, and to process foreign heavy oil at their refineries.
It is curious that Russia does not sell crude oil to the United States, but fuel oil. American refineries are mixing Russian fuel oil with light grades of oil to bring them up to parameters suitable for refining in factories that were built before the shale boom in the United States.
“No one really has fuel oil in such volumes, because it is a very specific low-quality fuel. Unfortunately, our oil refining has not been fully modernized, and we have such a product. But again, if we did not have fuel oil, we would, like Venezuela, supply crude viscous oil there. It is important that we had and still have a competitive proposal for the United States, ”says Simonov. The United States had no alternative in heavy oil grades, because they themselves removed both Venezuela and Iran.
The economy of supplying Russian fuel oil for the United States is most likely beneficial, otherwise no one would buy it. “Against the background of the weakening ruble, Russian oil is becoming much more profitable than other producing countries,” notes Artem Deev, head of the analytical department at AMarkets.
Last year, the largest importer of Russian oil to the United States was Valero, which bought almost 55 million barrels, followed by Exxon with almost 50 million barrels. Collectively, these companies accounted for nearly 50% of total Russian oil imports to the United States, according to customs data.
It is curious to see how the United States politically tries to play up this extraordinary story. "The Democratic Party is now bringing down everything on Trump:" Look to what he brought America to - the Russians, it turns out, are supplying oil to the United States because of this figure. " Trump himself said back in January that now Biden will come with his "green" program, collapse American shale oil, and the Russians will seize the American market with their oil, "says Konstantin Simonov.
Although, in his opinion, it is difficult to blame Trump. His task was to promote American oil to export markets, and he successfully accomplished it, removing competitors - Venezuela and Iran. “In general, American oil has only benefited from this. But there was such a political joke, ”the expert adds.
It is curious that literally last week it became known about the first deliveries to the United States of Russian light ESPO oil in the amount of more than 3 million barrels. Simonov is sure that this is some kind of one-off story. Because the United States does not make any sense to buy light oil from Russia when they have their own.
The deal may have come about due to low freight rates and low demand for the brand from independent Chinese refiners, in part due to an increase in the supply of cheap Iranian oil, analysts at Reuters say. The Russian ESPO is generally China-oriented and is popular with independent refiners in Shandong province. These refineries are geographically located relatively close to production - delivery takes only three to four days.
As for Saudi Arabia, in recent years it has been placing more and more emphasis on the more premium Asian region. It became China's largest oil supplier last year. A bitter battle over the Chinese market is taking place between the Saudis and the Russians.
“Saudi Arabia is increasing supplies to the countries of the Asia-Pacific region, since the market volume there is larger than in the United States, there are more consumers, and the price parameters are more profitable. The Saudis are following the path of increasing their market share in Asia, therefore they additionally offer discounts to consumers, as a result, the share of Arab oil in these markets is gradually growing, ”Deyev explains.
Text: Olga Samofalova