Finland has replaced Russian oil with raw materials from Norway, the USA and Great Britain

(Neste’s comment added)

MOSCOW, March 15 (Reuters) – Finland, once one of the EU’s most dependent on Russia, has completely halted imports of Russian Urals, replacing it with Norway’s Johan Sverdrup and US and UK raw materials, data from Refinitiv Eikon showed.

Since December 5 last year, EU countries imposed an embargo on all purchases of sea oil shipments from the Russian Federation. Finland imported the last shipment of Urals oil in July 2022, when contractual obligations to purchase Russian raw materials expired, according to the annual report of the Finnish refiner Neste Oil.

Deliveries of Russian oil to Finland in 2022 have fallen more than four times compared to 2021, to 1.5 million tonnes. While raw material shipments from Norway to Finland have increased to 5.65 million tonnes – also more than quadruple by 2021.

“Neste Oil does not comment on details of past and future oil suppliers to its refineries,” a company spokesman said, citing the company’s executive vice president of petroleum products.

Finland has historically purchased Urals oil almost exclusively, as the delivery of Russian raw materials to the country from nearby Baltic ports was the most cost-effective option for a country remote from other hydrocarbon sources.

Now the basis of oil supplied from Norway to Finland was Johan Sverdrup, which is close in quality to the Urals, but the country also bought lighter grades: Oseberg, Troll, Gudrun and some others.

According to data from the Eikon terminal, the cost of Oseberg, Troll oil averaged around $103 per barrel from March 2022 to March 2023, while the average price of Urals crude over the same period was $69 per barrel. Johan Sverdrup was trading about $4-5 a barrel less than Oseberg, Troll, traders said.

Shipping North Sea oil to Finland costs around US$2-3 per barrel, while transporting raw materials from Russian Baltic ports to Finnish Porvoo did not exceed US$0.5 per barrel, and Neste Oil often carried several tankers taken on long-term lease, reducing freight costs. In addition to Norwegian oil, Finland bought oil from the United States for the first time in 2022. US imports of raw materials, mainly WTI, amounted to 0.57 million tons last year, according to Refinitiv data. Oil deliveries from Great Britain, mainly North Sea Forties and Brent, amounted to 0.72 million tonnes. Also 0.24 million tons entered Finland from Danish ports in 2022, according to Refinitiv data. Traders say Finland’s expensive purchases of North Sea and US oil last year have been offset by high refining margins linked to rising world prices for petroleum products.

Refining margins at Neste Group’s refineries were $23.4 a barrel in 2022, compared to $9 a barrel in 2021, a company spokesman said, citing its financial report.