At a time when the Middle East political tensions increasingly weigh on global oil markets, Russia has made significant advances at the expense of the traditional Gulf-Arab oil exporters.
Russia’s Eastern Siberian Pacific Ocean (ESPO) crude oil has advanced as an Oil and Gas price reference by pushing further onto the global oil stage in early 2011 as it started off regular exports to China, according to a Platts release.
Russia’s exports to China, together with its January 2011 ESPO shipments to other Asia-Pacific countries such as Japan, South Korea and Philippines from the Pacific coast port of Kozmino, put the total daily ESPO exports for the month at about 600,000 barrels, the report notes, or double the exports since the oil stream’s initial launch a little more than one year ago, Platts, a leading global energy and metals information provider, said.
“Not only is the ESPO crude stream steadily becoming a more important regional stream, it is gaining attention from many regions, including the Middle East,” said Jorge Montepeque, Platts global director of markets reporting.
Russia's ESPO crude first started serving Asian markets in December 2009. A total of 1.318 million metric tons of ESPO, or the equivalent of 311,643 barrels per day, were delivered to China in January 2011 through the Eastern Siberian Pipeline.
From a strictly geographic perspective, the report notes, Russia’s ESPO pipeline deliveries to China and shipments to greater Asia raise question as to whether oil supply from the Middle East – which must travel a greater distance to Asia consumers than oil supply from Russia – will remain the preferred pricing reference for the Asia-Pacific region, Platts analysts said.
ESPO crude is similar in quality to Forties, which has lower sulphur content than Dubai or Arab Light oils, indicating it requires a less rigorous refining process than more sour crudes.