Prospects and risks of selling oil with high sulphur ratio on European market

The quality of Russian Urals oil is going down. Last year Lukoil has received for the first time official claim from European customers with regard to overnormous ratio of sulphur in crude oil. Higher sulphur ratio in Russian oil is the consequence of production misbalance - growing extraction of oil with higher sulphur ratio in the Volga regions and Ural mountains with simultaneous decline of higher quality oil from Western Siberia. 

Growing competition on international oil market, decrease of oil consumption in Europe, strengthening ecological requirements from European Comission with regard to oil product quality, lifting sanctions against Iran further worsen the situation of Russian exporters. Russian oil transportation company SC "Transneft" suggests to separate oil with high sulphur ratio to the single export direction and pipeline - Baltic pipeline system - 2 with oil terminal in Ust-Luga. According to estimations of Transneft, it might help to ensure quality of Urals export oil mixture. Consulting company Rusenergy in own research explains the situation on European oil and oil product market and makes evident vulnerable spots of Russia and ways to curb agressor.

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