Petrochemicals market will face serious changes in February

From February 5, the G7 and European Union will impose a cap on Russian petrochemicals. The import of Russian fuel will also be restricted.   

Similar measures were already implemented regarding crude oil. However, the cap and the ban on petrochemicals cause fear of a possible price hike.

Founder of consultant Oilytics Keshav Lohiya says that the ban on Russian supplies will bring significant losses and become a serious issue for transport companies.

The EU will have to replace 600,000 barrels per day. Russia, in turn, will have to search for new markets, store the oil on the vessels or reduce production. 

Currently, most of the supplies come to the EU from the U.S. and India as these countries produce more than they can consume, and this allows them to sell surpluses. It is expected that China will also export more fuel.

Such a situation isn’t considered a violation of sanctions. However, it shows their inefficiency. The transportation route of raw materials will increase by several thousand miles, and they will also need to be transported back.