The Russian government has solved the issue of export of pure Eastern Siberian oil and runs the hazard to spoil its relationships with OPEC member countries.

The foreign media report that Russian oil ESPO Blend to be supplied via
oil pipeline Eastern Siberia – Pacific Ocean (ESPO) to Far East
coastline of Russia can change the rules of game in Asia to the
prejudice of Middle East analogs.

For the next few years export of this medium-weight grade of oil with
low content of sulphur can grow up to 600,000 bpd from 250,000 barrels
in the 1st quarter of 2010 with taking to aim at petroleum processors
in China, Japan, and South Korea. This grade supplies will help Asian
countries to diversify oil import and diminish dependence on Middle
East.

If Asian refineries are satisfied with quality of oil of new grade then
the Persian Gulf countries will have to re-consider their oil export
strategy and pricing and possibly to offer a new grade to be similar on
quality with ESPO Blend that can change oil import geography in the
region.

Production of oil with low content of sulphur in Asia is reduced and
supplies of high-sulphur oil from the OPEC countries were lowered since
the end of 2008. Against this background Russia increases export to the
East striving to occupy the niche in the region with on-growing
consumption of energy products and depend less on the West. Opening of
ESPO branch to China will become an additional stimulus for this
strategy.

In the 1st quarter of 2010 quality of oil will be unstable as
transportation will be carried out on temporary scheme. At the same
time analysts also say that in the future ESPO Blend will suit ideally
for Asian oil refiners. The spot market offers few medium-weight oil
with low sulphur content and that is why appearance of this grade of
black oil can make the Persian Gulf countries to create their own grade
of similar quality.

Source: ABC.az

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