MOSCOW (MRC) -- Rosneft failed to sell oil in a jumbo tender after demanding prepayment in roubles, meaning the country's top oil company will need to find ways to divert more crude to buyers in Asia via private deals, reported Reuters.
The failure of the tender highlights a growing struggle by the Kremlin oil major to sell oil due to sweeping Western sanctions on Russia for the invasion of Ukraine.
Moscow, which calls the invasion "a special operation", has publicly acknowledged it has faced some oil export problems since March due to sanctions but pledged to boost cooperation with Asia to divert some oil sales from the West.
Western sanctions on Russian oil are part of a broader effort to isolate Moscow politically and economically for the invasion that includes discussion of an EU-wide oil embargo
The European Union also advised its members not to succumb to Russian President Vladimir Putin's demand to pay roubles for gas from Russian gas monopoly Gazprom.
The EU is much more dependent of Russian gas than on oil and analysts and economists have said a full embargo on Russian gas would plunge the continent deep into recession.
Last week, Rosneft followed on the footsteps of Putin's orders to Gazprom and asked for 100% prepayment and conversion of the payment into roubles for purchases of its oil.
Rosneft tendered to sell 6.5 MMtons of Urals, Siberian Light, Sokol and ESPO Blend oil loading from Russian ports in May-June but no bids were submitted by Monday, the five traders said.
Rosneft did not immediately respond to requests for comment.
As MRC informed before, earlier this month, India's HDFC Bank and some foreign banks stopped offering trade credit for oil imports to Nayara Energy, a Russian-backed refiner, and some suppliers are seeking payment upfront to avoid potential problems resulting from western sanctions against Moscow. Nayara has not been sanctioned as part of the international response to Russia's invasion of Ukraine, but Russian energy giant Rosneft, which owns 49% of the Indian refiner, has been.
We remind that in December 2021, Rosneft backed Nayara Energy, earlier known as Essar Oil, has chalked out massive expansion plans for India which include setting up of a greenfield petrochemical complex and ramping up its existing refining capacity from 20 million tonnes per annum (mtpa) to 46 mtpa at Vadinar near Jamnagar in Gujarat. The total envisaged investment for expansion, of which a major part is towards building a new petrochemical complex, is about Rs.1.5 lakh crore, they said. The expansion plans also include increasing its retail presence and additional investment at the captive port of Vadinar.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,487,450 tonnes in 2021, up by 13% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market totalled 1,494.280 tonnes, up by 21% year on year. Deliveries of homopolymer PP and PP block copolymers increased, whreas, shipments of PP random copolymers decreased significantly.