Neste’s oil refinery in Porvoo, Southern Finland, on 22 February 2022. The Finnish petroleum company says it has replaced roughly 85 per cent of the Russian crude oil it has used with other crude qualities. (Vesa Moilanen – Lehtikuva)

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THE FLOW of Russian crude oil to Finland has slowed down from an average of six tankers to one tanker a week since Russia launched its invasion of Ukraine on 24 February, reports Helsingin Sanomat.

Neste, a Finnish partly state-owned petroleum company that has sourced about two-thirds of its crude oil from Russia, announced four days after the invasion began that it will mostly replace Russian crude oil with other crude qualities.

The company reported earlier this month that it has taken delivery of one of the last remaining oil cargoes from Russia at the Port of Kilpilahti in Porvoo, where it operates the only crude oil refinery in Finland. About 85 per cent of the Russian crude oil, it added, has been replaced with other qualities within the framework of existing supply contracts and technical capabilities.

It also highlighted that it has not made a single purchase of Russian crude oil on the spot market since the start of the war and has stopped making new supply agreements for crude oil or fossil feedstocks produced in Russia. Its supply contracts for Russian crude oil expire in July and for other feedstocks by late December.

“We believe that substituting crude oil grades can be found on the world market,” the company said on 6 April.

Neste is also one of the largest users of Russian natural gas in Finland.

While the imports of crude oil have decreased significantly, other oil products may be harder to replace.

“Crude-oil imports from Russia have decreased since March, but other oil product imports are still continuing to some extent,” Olli-Pekka Penttilä, the head of statistics at Finnish Customs, stated to Helsingin Sanomat on 13 April. “It may prove more difficult to find a country to replace the other oil products.”

The newspaper highlighted that oil and natural gas, in particular, have been critical sources of income for Russia, accounting for roughly a third of state tax revenue last year and up to half in some years.

Russia is presently benefiting from rising energy prices – especially from oil prices hitting a 14-year high. Bloomberg Economics calculated at the beginning of the month that the country will earn over 320 billion US dollars from energy exports in 2022, representing a rise of more than one-third from 2021.

The European Union has announced the suspension of coal but not oil or natural gas imports from Russia. While a Germany-led group of member states has managed to block attempts to introduce broad-based energy sanctions, reports suggest that the bloc could be inching toward prohibiting oil imports from Russia.

The New York Times on Thursday wrote that the EU is “reluctantly” drafting a phased import ban on Russian oil products, with the announcement expected no earlier than after the second round of the French presidential.

Finnish Minister for Foreign Affairs Pekka Haavisto (Greens) indicated earlier this week that he expects the union to find a way to add oil to its sanctions regime against Russia.

Aleksi Teivainen – HT

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