The ongoing conflict between Russia and Ukraine has left global oil and gas markets in the uncertain and unstable, causing supply issues and price spikes, with oil reaching levels of more than $110 a barrel Thursday. The uncertain duration of the conflict, though, makes it difficult to predict how much of the disruption will be permanent and how much is just temporary.

Washington-based Gulf analyst Theodore Karasik tells VOA there are many “wild cards” in the ongoing military confrontation that “could drive energy prices up even further.” He argues that “in any case, there are big changes occurring in the energy industry.”

“The energy situation and the pricing is contingent upon how long this [conflict] goes for and to what degree it ends. We’ve already seen extensive sanctions put on Russia because of its actions in Ukraine. Those sanctions against Russia in the energy field are going to affect how the Russian energy industry operates, and we just don’t have a clear picture of that yet,” Karasik said.

In the meantime, buying of Russian crude has stalled on the back of rising uncertainty over the possibility of direct western sanctions on energy exports, sending prices into freefall and prompting buyers to find alternatives.

The Russian export blend Urals — which trades as a differential to Atlantic Basin benchmark Dated Brent — touched record lows in recent sessions.

A source within the oil trading industry, who specializes in global markets told VOA that European buyers are now actively sourcing alternative crude supplies — Poland’s PKN Orlen is taking supplemental cargoes from term supplier Aramco — and much of that will come from local North Sea production as well as West Africa and the United States.

The source who chose to be unnamed said that the Chinese refiners, particularly those in Shandong province’s refining hub, are key buyers of Russian crude grades Urals and ESPO Blend.

“They have proven less concerned with sanctions, having purchased significant volumes of Iranian crude in the past year. But ongoing disruption to the global banking system as a result of SWIFT sanctions means that even willing buyers are struggling to pay for cargoes. Sanctions against Russian fleet Sovcomflot have only added to the logistical difficulties of buying Russian crude,” the analyst said.

Experts believe that Russian firms may eventually seek to set up accounts with Chinese banks to facilitate such transactions. And cargoes of Urals loading now in the Baltic Sea look likely to head to north China in bulk shipments, with or without earmarked buyers.

“But that entails losses — current market structure means long-haul arbitrage economics are marginal and storage economics are negative. Shipping a cargo to Shandong and floating for months is a losing proposition, even if that cargo has nowhere else to go,” sources in the energy industry told VOA.

Paul Sullivan, a Washington-based Middle East analyst, argues there is no end to the number of wild cards that could change the energy situation. “The conflict increases risk and therefore costs of energy by adding risk premiums,” he says.

On the flip side, “sanctions [on Russia],” he adds, “could hammer the world economy and push energy prices down.” Meanwhile, “some oil and gas companies are leaving Russia or divesting from Russia … [and that] could disrupt supply chains.”

Sullivan goes on to say that potential “terror acts in Russia towards pipelines could push prices up,” while “Turkey closing off the straits to Russian war ships” could also “affect energy ships,” as well.

Experts note that the majority of Russian spot crude is sold through international trading firms like Trafigura, Vitol and Glencore — only a small share is marketed directly by Russian firms like Surgutneftegaz. If Russian crude oil comes under sanction, then the longstanding dynamics that underpin trade in Russian seaborne exports could change, mirroring recent developments in the country’s upstream sector which has seen an exodus as western oil majors exit projects.

Egyptian political sociologist Said Sadek tells VOA that countries in North Africa, like Egypt and Algeria, are being sought out to increase their gas exports to Europe to compensate for Russian gas, which makes up 40% of European imports.

“North African states that produce gas — Algeria, Egypt — Egypt have limited stock, but they have been increasing by 365% [quantities of] liquified gas, because 90% of Egyptian gas is used domestically, 10% is exported, and then we get gas from Israel and Cyprus and transfer it into liquified gas [to] export,” Sadek says.

The expert adds that Qatar also is being solicited to increase LNG exports to Europe, but the tiny Gulf emirate already sends much of its gas to Asia: “A lot of contracts — long term — have already been signed between Qatar, South Korea, Japan, China, which cannot be revoked.”

Sadek emphasizes the Middle Eastern state that could conceivably make up the difference for lost Russian gas exports to Europe is Iran, and he thinks some European countries are hoping to lift sanctions on Tehran to allow oil and gas exports to resume. He questions, however, if Iran — an ally of Russia — would be willing to “stab Russia in the back.”

Some Middle Eastern and north African states, Sadek points out, are facing a potential food crisis, as well, “because they import large quantities of wheat from both Russia and Ukraine. “Countries like Tunisia, Sudan and Lebanon cannot afford more expensive alternative sources of wheat,” and they could eventually face instability if a major staple like bread runs short.

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