NewBase 08-February-2023 Energy News issue - 1591 by Khaled Al Awadi.pdf

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NewBase Energy News 08 February 2023 No. 1591 Senior Editor Eng. Khaed Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
U.A.E Innovation Talks to bring together Dubai’s government
and private sectors to discuss a common vision for the future
WAM - Hazem Hussein
The Innovation Talks series, set to be organised by The Executive Council of Dubai from tomorrow,
will bring together heads and representatives of Dubai government departments, and experts from
major private sector companies to discuss how they can work together to develop a common vision
for the future.
The Innovation Talks series forms part of Dubai’s participation in the eighth edition of the UAE
Innovates 2023, the largest national event that celebrates innovation and innovators across the
country, featuring the participation of government and private sector organisations.
The three-day Innovation Talks series to be held in Dubai will include keynote sessions and
knowledge seminars delivered by government and private sector officials focused on highlighting
the importance of innovation at a time of rapid global change.
ww.linkedin.com/in/khaled-al-awadi-80201019/

Sharina Lootah, Coordinator of UAE Innovates 2023 events in Dubai, said: "We thank government
departments for organising various events to showcase their innovation success stories and for their
continuous efforts to raise awareness about the need to adopt a culture of innovation both socially
and in the workplace. Their achievements will be highlighted in February as part of our efforts to
showcase Dubai-wide innovation success stories during UAE Innovates 2023."
Maha Al Suwaidi, Senior Consultant at the Dubai Government Excellence Programme, said: “The
Programme has embraced innovation as an effective tool for developing government capabilities,
and included it as one of the main criteria for evaluating the performance of government agencies.
Today, we are pleased to see entities eager to participate in the Innovation Talks series, which
demonstrates the importance of sharing and exchanging successful innovation experiences. The
Government of Dubai is working to ensure that Dubai remains a leader in setting global standards
in the field of government excellence and adopting innovation as a criterion for excellence by
building global partnerships and developing capabilities in accordance with international best
practices."
The Innovation Talks series emphasises the importance of innovation, especially in providing
services, increasing the effectiveness of procedures and keeping pace with recent technical and
technological developments.
Innovation Talks Series
The first day of the session will feature an opening speech by Abdulla Mohammed Al Basti,
Secretary General of The Executive Council of Dubai; a knowledge seminar that will see Mona
Ghanim Al-Marri, Vice Chairperson and Managing Director of the Dubai Media Council .
The first day also features seminars on Space Science and Innovation led by Mohammed Al Harmi
from the Mohammed Bin Rashid Space Centre, as well as a seminar on Amazon’s Culture of
Innovation.
The second day’s agenda includes a keynote speech by Sultan bin Sulayem, Chairman and CEO
of DP World, Chairman of The Ports, Customs & Free Zone Corporation, on ‘Dubai’s Story in
Sustainable Innovation in Shipping and International Logistics’; knowledge seminars on Microsoft
and ‘Open AI’ Artificial Intelligence; and a panel discussion on Innovation in Social Media hosted by
Ferjan Dubai and SocialEyes.
The second day will conclude with a session conducted by SIA Partners on the topic ‘Innovation for
Organisational Agility’.
On the final day, Younus Al Nasser, Assistant
Director General of Dubai Digital and CEO of the
Dubai Data Establishment, will deliver a keynote
speech on the ‘Role of Data in Innovation and
Future Shaping’.
This will be followed by knowledge seminars
delivered by DEWA on ‘Sustainability Innovation’
and a seminar on the ‘Power of Data for Effective
Decision Making’ conducted by Visa.
The final session of the event will be a panel
discussion on ‘Social Innovation Towards
Sustainability’ featuring Goumbook and Nadeera.

India’s clean energy transition presents an economic opportunity
The National - John Benny
India’s “pro-growth” and “pro-climate” agenda presents a significant economic opportunity, Dr
Sultan Al Jaber, President-designate of Cop28, said.
“As India’s economy surges, it is dealing with the fundamental question that the whole world faces,”
Dr Al Jaber, who is also the Minister of Industry and Advanced Technology, said at the India Energy
Week in Bengaluru on Tuesday.
“How to adopt policies that are pro-growth and pro-climate at the
same time. How to provide for a world that will consume 30 per cent
more energy by 2050, while protecting our planet. In short, how to
hold back emissions, not progress.”
India, which aims to become net-zero by 2070, plans to produce
500 gigawatts of non-fossil fuel capacity by 2030. The country,
Asia's third-largest economy, also plans to produce 5 million tonnes
of green hydrogen annually by 2030, with the potential to reach 10
million tonnes as export markets grow.
“Last year, despite an ongoing war, fears of recession and a world still recovering from Covid, annual
global investment in clean energy exceeded $1 trillion for the first time,” said Dr Al Jaber.
Calling India’s renewable energy targets
“very achievable”, he said the UAE was keen
to partner with the country to advance clean
energy.
“We have spent the last two decades
diversifying our energy portfolio and we need
everyone on this journey with us, so that
together we can triple global renewable
energy capacity over the next seven years.”
Investment in renewable energy needs to
double to more than $4 trillion by the end of
the decade to meet net-zero emissions
targets by 2050, the International Energy
Agency said in its World Energy Outlook last
year.
The IEA’s stated policies scenario (Steps),
which is based on the latest policy settings
worldwide, expects clean energy investment
to rise to slightly more than $2 trillion by
2030.
This will be 'a Cop of solidarity' says Cop28
President-designate Dr Sultan Al Jaber, Dr
Al Jaber also said that clean energy policies
should take into consideration the needs of
people in the Global South, which includes
Latin America, Asia, Africa and Oceania.

“We must empower the Global South, where almost 800 million people have no electricity, in an
inclusive energy transition,” said Dr Al Jaber. “And we need to move from talking about goals, to
getting the job done.”
He also highlighted the complexity of the energy transition as a “system-wide rewiring” of global
economies and noted that despite the “impressive” growth of wind and solar power, renewable
energy by itself would not be sufficient.
“Without a breakthrough in battery storage, we must invest heavily in carbon capture, nuclear power
and the hydrogen value chain. But spending on these fundamental enablers of decarbonisation are
less than 5 per cent of what is spent on renewables.”
The UAE is set to host the next UN Cop28 climate summit, which will start at the end of November.
The meeting of heads of state, finance and business leaders, and members of civil society, will take
stock of what has been achieved since the Paris Agreement of 2015.
The UAE, Opec’s third-largest oil producer, is pursuing goals to reduce its carbon footprint and last
year, became the first country in the Middle East to set a net-zero target, which it aims to achieve
by 2050.
The Emirates plans to invest $160 billion in clean and renewable energy sources over the next three
decades.
It is building the Mohammed bin Rashid Solar Park in Dubai with a five-gigawatt capacity. Abu
Dhabi, which is developing a two-gigawatt solar plant in its Al Dhafra region, has set a target of 5.6
gigawatts of solar PV capacity by 2026.
“The task ahead is enormous. It represents the biggest shift in human development across every
aspect of our lives, from the way we produce and use energy, to how we grow our food, conserve
our water and preserve our natural ecosystems,” said Dr Al Jaber.
“The UAE Cop presidency is listening and ready to engage. Let us meet this challenge together.
Let us turn it into the opportunity of our lifetimes. And let’s make transformational, inclusive and
lasting progress.

Saudi Power to develop 7.2GW plant w/ GE, Samsung C&T, EDF
Zawya + TradeArabia + NewBase
Saudi Power Procurement Company (SPPC) has announced that 21 major developer/developer
consortiums including global energy leader GE, French utility major EDF, Samsung and India's
energy conglomerate NTPC have prequalified for the development of four combined-cycle electrical
power generation projects with provision for Carbon Capture and Sequestration (CCS) readiness.
Of these Independent Power Plant (IPP) projects with a total capacity 7,200 MW, two of them will
come up in the kingdom's Taiba city, while the other two will be in Qassim city. Each of the projects
- The Taiba IPP 1; Taiba IPP 2; Qassim IPP 1 and Qassim IPP 2 - will boast a capacity of 1,800
MW.
The list of the pre-qualified bidders (Financial and/or Technical) for the project include global energy
leader General Electric Company; French utility major EDF; Japanese groups - Marubeni; Kansai
Electric Power; Sumitomo; Jera and Sojitz Corporation - and top Korean firms Samsung C&T and
Korea Electric Power Corporation in addition to India's largest energy conglomerate NTPC.
TradeArabia had last month announced that the requests for proposals (RFPs) had been issued by
SPCC for these combined-cycle electrical power generation projects.
The top regional firms in the race include UAE groups - Abu Dhabi energy company Taqa; Kahrabel
FZE (a unit of French utility developer Engie) - Kuwait-based Gulf Investment Corporation and
Qatar's Nebras Power as well as leading Egyptian builder Orascom Construction.
The local firms which have now been prequalified are Saudi utility giant Acwa Power; Saudi
Electricity Company; Power and Water Utility Company for Jubail and Yanbu (Marafiq) and Alfanar
Company.
Also two key developers have made it to the prequalified bidders list but as developer consortiums
-Ajlan Brothers with China Power International Holding and Al Jomaih Energy and Water with Edra
Power Holdings.

U.S Domestic renewable diesel capacity t0 double through 2025
https://www.eia.gov/todayinenergy/detail.php?id=55399
U.S. production capacity for renewable diesel could more than double from current levels by the
end of 2025, based on several announcements for projects that are either under construction or
could start development soon.
Two factors behind growing U.S. renewable diesel capacity are rising targets for state and federal
renewable fuel programs and biomass-based diesel tax credits. The Inflation Reduction Act of
2022 extended the biomass-based diesel tax credits through 2024.
We estimate U.S. renewable diesel production capacity was 170,000 barrels per day (b/d), or 2.6
billion gallons per year (gal/y), at the end of 2022. Although we expect some announced projects
will be delayed or canceled, if all projects begin operations as scheduled, U.S. renewable diesel
production capacity could reach 384,000 b/d, or 5.9 billion gal/y, by the end of 2025.
Renewable diesel is a fuel that is chemically equivalent to petroleum diesel and nearly identical in
its performance characteristics. The same is not true of biodiesel, which is chemically different from
petroleum diesel. Renewable diesel’s chemical equivalence to petroleum diesel gives it a couple of
advantages over biodiesel.
One advantage is that producers can distribute renewable diesel in petroleum diesel pipelines. A
second advantage is that traditional diesel engines can consume any blend level of renewable
diesel, including pure renewable diesel, with no significant side effects. In contrast, biodiesel can
only be blended into petroleum diesel between 2% and 20% of the diesel fuel by volume.
Renewable diesel has some of the highest greenhouse gas (GHG) reduction scores among existing
fuel pathways in programs such as the federal Renewable Fuel Standard (RFS), the California Low-
Carbon Fuel Standard (LCFS), the Oregon Clean Fuels Program, and the Washington State Clean
Fuels Program.

Investment in new renewable diesel production capacity has recently grown significantly in the
United States because of renewable diesel’s interchangeability with petroleum diesel in existing
petroleum infrastructure and because of government incentives. In 2022 and early 2023, the
following eight new renewable diesel refineries began production:
 CVR Energy’s plant in Wynnewood, Oklahoma
 Diamond Green Diesel’s plant in Port Arthur, Texas
 HollyFrontier’s plant in Artesia, New Mexico
 HollyFrontier’s plant in Cheyenne, Wyoming
 Montana Renewables’ plant in Great Falls, Montana
 New Rise Renewables’ plant in Reno, Nevada
 Seaboard Energy’s plant in Hugoton, Kansas
 Shell’s plant in Norco, Louisiana
The production capacity currently scheduled to begin operation could allow renewable diesel to
contribute to a greater share of West Coast diesel consumption. Most renewable diesel in the United
States has historically been consumed on the West Coast, where producers can take advantage of
both RIN credits from the RFS and state credits from one of the state renewable fuel programs. A
n average of 520,000 b/d of distillate fuel oil was consumed on the West Coast in 2021. The region,
which is also the largest renewable diesel importing region in the United States, could soon meet
the majority of its distillate fuel needs from renewable diesel by 2025 if domestic renewable diesel
capacity does, in fact, increase as scheduled.

NewBase February 08 -2023 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil steady on subdued dollar, traders await more inventory data
Reuters + NewBase
Oil prices were little changed on Wednesday amid subdued movements in the dollar, and as
investors waited for more inventory data for more clues on demand trends.
Brent crude futures rose by one cent to $83.78 a barrel at 0605 GMT, after gaining 3.3% in the
previous session. U.S. West Texas Intermediate (WTI) crude futures climbed by 22 cents to $77.36,
after jumping 4.1% in the previous session.
Oil benchmarks are expected to retain support after Federal Reserve Chair Jerome Powell sounded
less hawkish on interest rates than markets had expected, while the latest data showed U.S. crude
inventories fell despite earlier expectations of a climb.
The improved risk sentiment in the aftermath of Fed Chair Jerome Powell's comments, along with
a weaker U.S. dollar, seem to be tapped on for some upside in oil prices, after seeing a lacklustre
performance since end-January," said IG's market analyst Yeap Jun Rong.
Oil price special
coverage

"The reservation is that the overnight downside reaction in the U.S. dollar has been more measured
as compared to before," said Yeap, adding that any continued recovery in the dollar could still serve
as a headwind for oil prices.
The dollar index was down slightly on Wednesday, extending losses after Powell's comments on
Tuesday, making oil cheaper for those holding other currencies.
With less aggressive interest rate hikes in the United States, the market is hoping the world's biggest
economy and oil consumer can dodge a sharp slowdown in economic activity or even a recession
and avoid a slump in oil demand.
"I think we're in a reasonably balanced market," said Westpac senior economist Justin Smirk.
"If we have stronger than expected growth out of the developing world, (oil) prices will be firmer and
OPEC will have to step up output. That's not our core view. We don't see a big surge in demand,"
he said.
Supporting the market, weekly inventory data from the American Petroleum Institute industry group
showed crude stocks fell by about 2.2 million barrels in the week ended Feb. 3, according to market
sources.
That defied expectations from nine analysts polled by Reuters, who had estimated crude stocks
grew by 2.5 million barrels.
However, gasoline and distillate inventories rose more than expected, with gasoline stocks up by
about 5.3 million barrels and distillate stocks, which include diesel and heating oil, up by about 1.1
million barrels.
The market will be looking to see if data from the U.S. Energy Information Administration, due at
1530 GMT, confirms the decline in crude stocks.

NewBase Specual Coverage
The Energy world –February -08 -2023
CLEAN ENERGY
The EU’s Ban on Russian Diesel Won’t Really Stop Fuel Flows
(Bloomberg) + NewBase
For decades, a steady stream of ocean tankers has filed back and forth between a small cluster of
ports in northwest Europe and the Baltic Sea. Typically, each would bring about 40 million liters of
diesel to help keep Europe’s economy humming. Tomorrow, that will be banned — along with almost
any other deliveries of Russian fuels to the European Union.
While that had initially caused some alarm, the new rules are designed to be so inherently leaky
that it will dull the pain for both sides. The biggest winners will very likely be traders and shipping
companies as the fuel appears set to keep flowing, just via more complex, roundabout routes.
“The system will find its equilibrium sooner or later. At a cost for everybody, of course,” said Dario
Scaffardi, who until last year ran one of Europe’s biggest oil refineries as chief executive of Italy’s
Saras SpA. “I don’t think there’s going to be any big crisis.”
The price of diesel soared in Europe when Russia first invaded Ukraine almost a year ago. It’s since
declined somewhat, and recent moves suggest easing concern about the impact of the ban.
The bloc, in agreement with Group of Seven governments, is also introducing a price cap of $100
a barrel on Russian diesel.
That means any third countries seeking to access key services for the nation’s cargoes will only be
able to do so if they pay below the cap. For example, Europe and the UK are major providers of
shipping insurance and reinsurance that would otherwise be prohibited.

But rather than impede exports, the relatively high threshold is designed to let them happen.
Rerouting diesel-type trade flows through non-EU countries will also cushion the impact of the ban.
Still, there’s plenty of uncertainty about how all of this will play out. Europe, where transport, industry
and farming are all heavy consumers of diesel, has already endured months of energy stress caused
by the war. The crunch has sent fuel bills skyrocketing and helped drive economies toward
recession.
And there may well be some early disruption to supply. Russia and those companies trading its fuel
will need to line up alternative buyers for the roughly 600,000 barrels it previously sent to the EU
every day, as well as sort out shipping and credit.
Stockpiling Effort
Countries have been urgently stockpiling in recent months, with shipments into the EU hitting the
highest since at least the start of 2016 in the final quarter of last year. Arrivals have also remained
well above normal so far in 2023.
In addition, there are numerous legal ways to circumvent the ban that will keep Russia’s exports
and Europe’s imports flowing, even if direct trade will halt.
Russian crude is even likely to get processed in countries like India and then get sent to Europe as
non-Russian diesel.
“We don’t expect Europe to run dry,” said Eugene Lindell, head of refined products at Facts Global
Energy. “There are enough volumes around, it’s just a question of tapping the possibilities.”

For now, Russia appears to not be anticipating much disruption. It plans to export about 730,000
barrels a day of diesel from key western ports this month, according to industry data seen by
Bloomberg. That would be the biggest flow since at least the start of 2020.
And the nation’s energy minister sees no reason for a sharp drop in oil refinery operations and fuel
output when the EU’s measures kick in, Tass reported.
Whether or not it plays out that way depends, in part, on how well Russia can muscle into new
markets. For example, getting countries to buy Russian diesel and then those nations redirecting
fuel they would previously have been making — or importing — toward Europe.
This may be attractive to traders in nations who can buy cheap Russian cargoes and sell their own
supply into the EU at a marked-up price.
Russian diesel from the Baltic Sea was assessed at around $90 a barrel earlier this week, about
25% below the cost of the fuel for delivery into northwest Europe, according to data from Argus
Media Ltd. With so much wariness around dealing with Moscow, discounts at the point of export
could get deeper still.
Turkey imported a record amount of Russian diesel-type fuel in December, based on data going
back to 2016 from Vortexa Ltd., compiled by Bloomberg. Its overall exports also surged to a record
high last month.
This trade is legal and looks a likely way that the impact of the ban will be cushioned.

Similarly, Morocco’s imports jumped last month, with a big increase from Russia. The more that
happens, the more traders can divert cargoes from traditional suppliers toward Europe.
Such workarounds will help flows to be essentially re-shuffled rather than dramatically cutback.
But they also add complexity to a vast global trading system, heightening the risk of supply-chain
snarls or unexpected disruptions.
Ships may have to sail significantly further, pressuring the merchant fleet. Already in the
Mediterranean Sea, tankers carrying diesel from Russia’s Baltic port of Primorsk to Turkey have
been sailing in the opposite direction to those hauling the same product from the Middle East to
France.
According to Ben Luckock, co-head of oil trading at Trafigura, there’s a “vast volume that needs to
find a new home.” “We’re building a deep inefficiency into an oil market that has spent decades
becoming incredibly efficient,” he said. “Inefficiencies tend to increase prices.”
Along with the ban on seaborne imports is the price cap. Russian fuel can also still be sold legally
above the cap, just not to firms using western financial services. A large number of tankers — a so-
called shadow fleet — has been assembled for this purpose.
All of that still may not be enough to cover all Russia’s output, however. Wood Mackenzie Ltd., a
London-based consultant, expects the country’s diesel exports to fall by about 200,000 barrels a
day this quarter versus the last three months of 2022.
Mark Williams, research director of short-term refining and oil products at Woodmac, expects a
diesel price spike, though not quite to the levels in 2022, “when the market freaked out.”
“There’s been time to build stocks and source alternative barrels,” he said.

Is EU ready for life without Russian diesel?
Ashutosh Pandey
The bloc has already shunned Russian seaborne crude oil but giving up on the country's diesel
could be much more painful. However, China and India could play a big role in easing some of that
disruption.
On Sunday, the European Union will join the United States and the United Kingdom in stopping
imports of Russian diesel and other refined oil products, as it looks to end its energy ties with
Moscow which for years had been its biggest source of energy.
The ban is coupled with a price cap on Russian refined fuel, aimed at hurting Russian revenue while
ensuring the EU fuel embargo doesn't end up driving up global diesel prices which are already high.
The oil products embargo comes two months after a similar ban on Russian crude oil brought in by
sea — both announced in June as part of the EU's sixth sanctions package against Russia in
response to Moscow's "brutal and unprovoked attack on Ukraine."
While the crude oil embargo and the oil price cap which came into effect on December 5 passed off
without any major disruption, the ban on refined fuels — in particular, diesel with its wide industrial
and domestic usage — has pushed the market into uncertainty amid historically low diesel stocks
in Europe.
"The crude is more fungible," said Eugene Lindell and Joshua Folds from FGE energy consultancy.
"It's much more difficult to produce diesel/gasoil whereas, for crude oil, the upstream production is
much more varied on a global scale. There's a lot more kind of crude in the market and there
potentially is diesel/gasoil," they told DW.
Will the ban drive up diesel prices?
That would largely depend on how successful the European countries are in finding alternative
sellers to help fill up the void caused by the ban and how effective Moscow is in finding new markets
for its fuel shunned by the EU. If those two things happen, then the impact on supply and prices
would be muted and short-lived.

If not, then the sanction could lead to major disruptions in diesel-reliant industries such as
transportation and agriculture, with fuel price rises further undermining the fight against inflation.
The perceived disruption is already driving up diesel prices, which already have been stubbornly
high over the past year and a half. While the situation has improved in recent months due to a mild
winter, diesel stocks remain at uncomfortable levels.
Diesel prices could climb further in the short term to reflect an increase in shipping costs as supplies
would now need to come from regions further afield, higher production costs in countries such as
the US and the risk premium.
"The market is very sensitive right now and very worried," the FGE analysts told DW. "The world
still has to see that those Russian flows do get rerouted and that there is not a sustainable disruption
to Russian flows. Once the market recognizes that, then the risk premium and the sentiment levels
should go lower."
Diesel inventories in the EU fell last year as soaring natural gas prices pushed up demand for the
fuel for heatingImage: picture-alliance/imagebroker/M. Dietrich
Who could the EU turn to for diesel?
The EU relied on Russia for nearly half its diesel needs before Russia's invasion of Ukraine on
February 24, 2022. That share dropped over the past year but remained significant with EU
members buying in excess of 200 million barrels of diesel last year, according to energy analytics
firm Vortexa.
In fact, in the run-up to the ban, the bloc increased its purchases from the country to pre-invasion
levels in preparation to wean itself off Russian fuel, something Kevin Wright, an analyst from energy
data firm Kpler, described as the "last hurrah" before the embargo kicked in. "The last chance to
buy from the nearest large source, keeping freight costs down compared to supply from further
afield," he wrote in an analysis on Kpler's website.

The ban has left the EU with a void of about 600,000 barrels of diesel and related oil products per
day, a gap that the EU intends to plug with increased supplies from the Middle East, Asia and the
US. With its own refining capacity under duress, the EU has already been relying on those regions
over the past months to make up for the shortfall.
That dependence is only likely to increase with the ramp-up of large refineries such as the Al-Zour
plant in Kuwait and the Jazan refinery in Saudi Arabia. Additionally, Germany has inked a deal with
UAE's Abu Dhabi National Oil Co that would see the oil firm provide 250,000 tons of diesel a month
in 2023.
The bloc could also benefit from so-called washing, wherein Russian diesel would be blended with
other non-Russian products in countries such as Turkey and re-exported back into Europe.
How about China and India?
India and China, which have emerged as the biggest buyers of Russian crude oil in the last 12
months, could play a big role in shoring up the EU's diesel stocks.
India's diesel exports to Europe have soared since the invasion as refiners take advantage of low
feedstock costs thanks to steeply discounted Russian crude and high diesel prices.
In a sign of times to come, last year, when workers' strikes shut down the French refining sector,
the EU saw a surge in diesel and related products imports from India, which isn't a traditional
supplier of the fuel to Europe.
China has raised its first batch of 2023 export quotas for diesel and other refined oil products,
exports of which have surged in recent months. The move is expected to keep its diesel exports at
record levels, which could potentially help push barrels from other producers westward into Europe.
"China policy is the game changer," said Mark Williams, a research director at Wood Mackenzie,
adding in a note to clients that the country "holds the key to all of the surplus refining capacity
globally."

Where will Russia sell its diesel?
Russia has managed to keep its crude oil flowing, largely with support from India and China, who
have snapped up the oil shunned by Moscow's traditional European buyers at huge discounts.
However, rerouting its diesel away from its largest market could be more challenging in the absence
of a ready market for Russian fuel.
Experts expect Russian diesel earlier sold to Europe to be diverted to Turkey and countries in Latin
America and Africa.
"Russia has already been forced to discount its diesel heavily to get it sold to people that don't
necessarily need it," Lindell said.
Lindell, who is the head of refined products at FGE, expects a large portion of the Russian diesel to
reach Turkey and then be rebranded and reexported into Europe as "Turkish diesel." Turkey has
seen a big rise in diesel imports from Russia in the past months.
"There are countries that are willing to accommodate and to take discounted barrels," Lindell said,
a reason why FGE doesn't see a decline in Russian oil product exports in 2023.
Yet, there are others who say Russia would struggle to relocate all of its diesel and might be forced
to cut output.
What would be the impact of the diesel price cap?
The European Commission has proposed that the European Union set a $100 (€91) per barrel price
cap on Russian diesel and a $45 per barrel cap on discounted products like fuel oil.
The price cap is meant to ensure that Russian diesel and other oil products can still be sold to third
countries and prevent any massive spike in prices following the EU ban. The mechanism would
allow European insurance and shipping firms to continue offering their services to shippers carrying
Russian oil products to other regions as long as the fuel is purchased at or below an agreed cap
level.
The oil products price cap would have minimal impact on Russian refining crude runs and distillate
exports, Wood Mackenzie's Williams said, adding that with Russian crude prices as low as $40 a
barrel refining margins would still remain strong.
"At these levels, Russian refining economics are still very strong, so the incentive to refine crude
into oil products remains high," Williams said.
The price cap mirrors a similar measure put in place for Russian crude. The crude oil price cap of
$60 a barrel has helped keep Russian oil flowing but at steep discounts, as was intended.

NewBase Energy News 08 February 2023 - Issue No. 1591 call on +971504822502, UAE
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Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
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energy, waste management, plant Automation IA and environmental sustainability in different parts of the
world. Khaled has become a reference for many of the Oil & Gas Conferences and for many Energy program
broadcasted internationally, via GCC leading satellite Channels. Khaled can be reached at any time, see
contact details above.

NewBase 08-February-2023 Energy News issue - 1591 by Khaled Al Awadi.pdf

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NewBase 08-February-2023 Energy News issue - 1591 by Khaled Al Awadi.pdf