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Caspian Oil and Black Sea - Mediterranean Markets.

Last year some 48mty (960kbd) of Caspian and Russian crude and oil products passed into the Black Sea. Some 2.2mty (44kbd) of Middle East crude entered the Black Sea from the Mediterranean through the Bosphorous.

Bulgaria and Romania absorbed 10.8 mty (216kbd) for use in their own refineries.

Although the Black Sea market is beginning to grow, it is at a slower rate than originally predicted.

In 2000, some 74mty (1.4mmbd) of Russian/Caspian oil passed through the Bosphorous to compete in the oil markets of the Mediterranean and more distant centres.

Black Sea refineries are primarily configured to run on sour crude for residual fuel oil production, which suits the Russian export blend.

The sweet light crudes of the Caspian are more suited to the refineries of the south Mediterranean and northwest Europe, where there is a heavy demand for environmentally friendly oils, at a time when the North Sea supply goes into gradual decline.

Initially up to 2 mmbd of light Middle East and North African crude supplies could be displaced from the Mediterranean market by Caspian exports, but the market competition will be fierce. The demand in the Mediterranean for sweet crude is also skewed.

The eastern Mediterranean market is large, but refineries in Turkey Greece and Israel run primarily on sour crudes from the Middle East. This is unlikely to change in the short to medium term. Market competition for light Caspian crudes within the Mediterranean will therefore focus on the west.

However, once South Caspian light crude reaches the deepwater Mediterranean port of Ceyhan, it can also be loaded onto VLCCs/ULCCs for competitive transport to the markets of northwest Europe and the US eastern seaboard.
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Publication:APS Review Gas Market Trends
Date:Sep 24, 2001
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