By Arathy Somasekhar and Marianna Parraga
HOUSTON (Reuters) - The United States is expected to ban imports of Russian oil as soon as Tuesday, sources familiar with the matter said, in retaliation for Moscow's invasion of Ukraine. Russia is the world's second largest exporter of crude oil and petroleum products.
U.S. IMPORTS
The United States imported 672,000 barrels per day of Russian crude and refined products last year, according to Energy Information Agency data. Of that, 30%, or 199,000 bpd was crude, while 473,000 bpd was refined products.
Russian crude imports touched a record high in 2021, after U.S. Mars grade crude production was halted in the second half of the year due to hurricanes along the Gulf Coast, which damaged the offshore LOOP facility.
PRODUCTS DOMINATE IMPORTS
Nearly 75% of Russian products imported last year, which include unfinished oils, such as naphtha, some types of fuel oil, and feedstock for refiners of heavy crude. Those products are used for further processing and are then used in refined goods exported largely to Mexico and South America.
So far this year, U.S. weekly imports of Russian crude averaged some 57,000 bpd, a decline from the volumes in 2021, the EIA data showed.
Russian fuel oil goes mostly to refiners in the U.S. Gulf coast, while crude is mainly taken by East Coast refiners, including PBF Energy and Delta Airlines (NYSE:DAL)' Monroe Energy refinery.
Russia also exports vacuum gas oil (VGO), a popular feedstock for U.S. refiners. Puerto Rico also regularly imports Russian gasoline through some trading companies, according to Refinitiv Eikon customs data.
REPLACING RUSSIAN BARRELS
If the ban proposed by Washington cuts all of Russian origin oil barrels, making up the product shortfall would be difficult given how tight U.S. product inventories are, RBC analysts said.
Bank of America (NYSE:BAC) analysts added that less than half of Russia's overall crude exports could be replaced by a combination of incremental U.S. shale production, barrels coming from Iran, and increases by OPEC+.
Clay Seigle, an independent analyst in Houston, said energy data firm Vortexa's cargo tracking data showed that some 80 million barrels of Russian crude were shipped but have not reached a destination. That volume is 33% higher than last month.
The accumulation of undelivered cargoes comes after voluntary company-level boycotts, in the aftermath of the Russian invasion of Ukraine on Feb. 24.