Specialist
Former VP at Royal Dutch Shell plc
Agenda
- Potential impact of interruptions or sanctions on Russian crude supply on refining
- Alternative crude supply strategies and implications of OPEC (Organization of the Petroleum Exporting Countries) policy
- Demand elasticity for refined products amid rising prices and outlook for shift to renewables
- Key industry regulations and possible government policy responses
Questions
1.
What are your views on global oil demand? Obviously we’ve seen oil prices spike and a lot of volatility. Do you expect demand destruction to emerge?
2.
The IEA [International Energy Agency] stated that Russian oil production could fall by as much as three million barrels per day from April 2022. Is there an oil price level that could start to see demand contracting in the shorter term?
3.
What are the closest substitutes for Russian crude oil on the market today?
4.
When we’re thinking of refineries and looking for alternative feeds to replace Russian supply, what are the difficulties in running those alternative feeds? How long does it typically take a refinery to adjust to new feeds?
5.
You highlighted that European refineries are likely to face the most challenges in switching off from Russian supply. What is the impact on European refiners from having to switch off these Ural barrels? How much ability do they have to find other, heavier replacements, or might they have to start running sweeter barrels through their refineries?
6.
You mentioned the discount on some Russian crude and seeing buyers, such as China and India, looking at it. What are your thoughts on the level of discount we’re seeing? Is there a discount on Russian crude that would attract more buyers, beyond China and India?
7.
How much more volume of Ural barrels could Asia’s refiners handle if they are redirected out of Europe and other markets for them?
8.
Do you have any views on the impact on yield or runs for those refiners if Asia’s refiners do take more of the Russian crude?
9.
You said you disagree with the IEA’s statement that Russian oil production would fall by as much as three million barrels per day. What do you think is a more realistic estimate if we look to spring 2022? How might production in Russia develop?
10.
Could you outline the logistics of exporting crude from Russia? How have European refiners typically been supplied? We touched on these refiners and some being connected to the pipeline.
11.
How important are trading companies such as Glencore, Trafigura, and Vitol for trading Russian crude, and are they still re-marketing and looking to place barrels?
12.
Do you see European or other western refiners looking to use Iranian barrels if the political challenges can be overcome? Iran and Venezuela have both been in the news.
13.
What do you think are the medium-term implications of the Russia-Ukraine conflict for the European energy market, perhaps two years out? Clearly, this situation is very volatile and dynamic.
14.
We mentioned peak oil demand being pushed out in BP’s most recent market assessment. If we do see this accelerated push for renewables reducing oil and gas, what’s your view on peak oil demand? How high do you think it would be?
15.
How do you think the Russia-Ukraine conflict changes the pace of Europe’s transition to renewable energy? How do you think governments and companies might be thinking about that?
16.
What’s your outlook for Russian oil and gas production, given some of the capital or technical expertise leaving the industry? We’ve discussed the impacts on Russian production of the commercial limitations from sanctions. Several western IOCs [international oil companies] have pulled out of Russia’s oil and gas industry.
17.
How do you expect some of the oil majors to invest in the short term? Could any regions in the upstream attract additional investment? We’ve discussed the renewables speed-up and obviously the oil majors have been somewhat reluctant to invest in oil and gas, even prior to the crisis.
18.
Are there any points we might have missed that you would like to highlight?
