by Jorge Vilches for the Saker Blog

Europe has now painted itself into an infamous corner with only two choices left, nothing else. Both are definitely bad and terribly expensive — probably un-payable — in political and financial terms. On May 30, Brussels (a) dropped its previous declared strategy of ´buying Russian oil to prevent Moscow from selling it elsewhere at soaring prices´ (???) and (b) approved its sanctions package No. 6 imposing a ban on Russian seaborne oil imports. But by Christmas such ban will supposedly exceed 90% of total Russian oil as Germany and Poland have ´volunteered´ to reduce their own pipeline imports by then. Still, 65% of European consumers who today import Russian seaborne oil will suddenly face either one of the only two possible highly detrimental options explained hereinafter. Meanwhile the remaining 35% would theoretically benefit from the Russian Druzbha pipeline which will continue to safely feed them with the excellent Urals oil. But not quite and not really, because an ugly catch is awaiting Europe already cocked — line, hook and sinker — as if planned by its enemies, not its leaders as is the case. Migrations and unemployment cannot be avoided with the self-destructive ideology now rampant in the EU political mindset. Probably unknowingly, the EU Commission President Ursula von der Leyen paraphrased Mao Zedong by considering this “a big step forward”.

Ref #1 + Ref #2

the rub

There is a very important game-changing rub that short-sighted EU politicians haven´t yet fathomed, let alone sorted out. And it will hit them hard, head-on, blindsided without any protection whatsoever. Not even their favorite protection, i.e, political cover for an obvious self-inflicted harm that public opinion is now witnessing front & center. Because, as duly forewarned, there will be tons of very serious problems with the 65% of consumers using — and most negatively affected by — the new non-Russian seaborne oil blends which literally no one would be exempt from.

Not even the remaining 35% of supposedly “Druzbha safe” oil consumers. How come ? In one minute you´ll find out.

Ref # 3

atomic fall out

Apparently, European brains are AWOL. The sole exception could be Hungary (sorta) the most prominent amongst the opponents of the embargo comparing its potential effect to “an atomic bomb”. So now here we have the atomic bomb being dropped, although rather than an extraordinary explosion it´d be a silent implosion of sorts that not even Hungary has thought of. For, theoretically, this EU ban on Russian seaborne oil would not affect Hungary et al, at least for now, as they would supposedly continue business as usual (not). And supposedly the same would happen with refineries such as all-important Schwedt which, for the time being at least, same as Hungary will continue to receive the Druzbha pipeline feedstock all with 100% normality with excellent Russian oil they are most used to consume, process and refine regularly … But not quite not really anymore, because the non-Russian oil fed to the other refineries and other chemical processing plants in Europe (65%) will cause havoc with knock-on impact throughout the economy directly affecting the remaining 35% of supposedly still “safe” consumers that will continue receiving the Druzbha pipeline feedstock with excellent Russian oil. So, it´ll be an all-around contagious bloody mess.

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You just can´t have 35% of the plants processing and/or running with “good” Russian oil still fed by the Druzbha pipeline… while the remaining 65% run on “bad” unknown non-Russian seaborne oil. It just doesn´t work that way.

Basic laws of physics, chemistry, geology, logistics, engineering, politics, business and trade are being violated without mercy by such an approach. Economies are integral, non-divisible. Will any Karens fill up their fuel tanks with “bad” gasoline / petrol derived from “badly” refined non-Russian oil… or intermittently supplied at filling stations on and off as in now-you-have-it but then you don´t ? What about trucks and plant machinery ? Petrochemicals anyone ?

Will any businesses want to deal with and buy products from associates processing new, yet unknown non-Russian oil blends plagued with problems of every sort derived from their lack of proper matching with their now necessarily hurriedly modified & retrofitted processing plants ? Reference #3 below describes the severe harmful differences between Russian and non-Russian oil blends regarding reservoirs + investments + price + quality + quantity + delivery + refinery feed + Baltic ports modifications + logistics + refine-ability + vendor performance + contract sustainability,etc.

Ref # 4

Option 1 (expensive) cheating

As European businesses know perfectly well, Option 2 simply means suicide, no doubt about it. So per Option 1 Europe avoids Option 2 and just plain cheats, still hurting itself badly by buying the very same Russian oil it says it´d be banning (not) but actually paying for it to third parties through “triangulation” which is far more EXPENSIVE. That´d mean that Russian oil would be sold to third parties as many times as needed so that the original Russian source can no longer be traced thus declaring it to be non-Russian and delivering it at European ports. This may also include STS or Ship-To-Ship transfers. Actually, even before being downloaded to the very first tanker somewhere in Russia, the now EU banned Russian oil could already be sold at least once, maybe more times. Of course, with each pass of hands, some mark-up is added to justify the investment…and the risk of being caught red-handed somewhere along the line. So the very same excellent Russian oil would get to Europe with at least a 35 to 50% higher price which would defeat the purpose of the EU Russian seaborne oil banning decision. Additional cheating could also include mixing Russia´s Urals oil with other third party blends of different origin OR tapping the South Druzbha pipeline branch into Hungary et al so better keep a close eye on that also. Still, whatever the cheats would still be far more expensive.

Option 2 (expensive) harm

If Europe effectively bans seaborne Russian oil for real, it´d fall into the infamous TRAP of ruining 65% of its industrial base through the failed attempt to use third party non-Russian oil blends with TONS of problems derived from the necessarily incomplete/unsuccessful attempt to adapt refineries and processing plants in 6 months time as repeatedly explained to death in deep detail and forewarning flashing signs at Ref #5

The EU would thus still have the remaining 35% of traditionally excellent products derived from the Urals oils blend delivered by the Russian Druzbha pipeline and refined and/or processed as usual INTERMIXED and “competing” in the very same European economy with a rainbow planoply of different products obtained from different yet-unknown oil blends (65%) through differently modified process plants and refineries which would not be a close equivalent of original Druzbha products obtained with this excellent, proven Made-In-Russia raw material which European refineries and processing plants are specifically tuned-in for. For Heaven´s sake which part of this is so hard to understand ???

Ref #6

worse of both worlds

In a sense, it´d be the worst possible of all cases. It would mean a wholly unfair competition as Druzbha pipeline fed plants would have tremendous advantages over those fed with the new unknown oils plus the corresponding retro-fitting / reconversion downtime (or plain non-performance) kicking them outright out of the market for unknown period of time possibly bankrupting them and creating EXTRA-ordinary logistics problems to consumers throughout Europe.

Allowing for the Druzbha pipeline to continue feeding 35% of Europe with excellent Russian oils will mean the perfect comparison standard of practice. And it would reveal the fallacy of the premise itself, i.e, that Russian oil can be substituted easily and without enormous great pain. But no rewinding is allowed, sorry. And history will not be kind watching how “the EU makes sure to phase out Russian oil in an orderly fashion, in a way that allows us and our partners to secure alternative supply routes minimising the impact on global markets” Who are you kidding Ursula ?

bad options

The new unknown oil blends cannot be described because they do not exist and quite possibly may never exist,

Russian Urals oil = enormous, well-known, geologically & physico-chemically stable reservoirs, reliable, well studied.

Unknown new oils = experimental mix from occasional “beach-front bazaar” vendors variable in time, not well coordinated. Venezuela oil, not good. Middle East oils, not available. Will North Sea supply ALL of Europe ?

In a nutshell, the world wasn´t anywhere nearly prepared for an EU ban on Russian oil… or other Russian fuels…

So now an EU Russian seaborne oil ban would require deep — and in many ways impossible – urgent modifications of European refineries and chemical processing plants throughout in order to adapt them to new yet-unknown feedstocks if ever possibly attainable as explained hereinafter. Instead of shooting itself in the head temple Europe now chooses to shoot itself in both knee-caps and both elbows…Is there not 1 thinking mind in Europe to stop this utter nonsense ?

Oil pipelines

European ports

Each and every European port will probably require modifications adapting to new handling, unloading, storage and additional delivery requirements of non-Russian oil from whichever tanker fleet is found, yet unknown, if any. This means building new dedicated facilities per specific consumer and tanker fleet needs (supposedly fixed, unchanging) in order to match the processing foreseen and executed until today with necessarily different Russian oils. As well known examples, below please find equivalent modifications to be urgently made at Baltic and North Sea ports which may also need to be similarly executed throughout European ports as needed. It´s an unfathomable mystery how all of this will be done simultaneously while maintaining current production at refineries and processing plants as current supply requirements dictate. Of course, countries will be selfish and, just as an example, Poland will not accommodate for German needs at its Gdansk Baltic port. Poland now has other priorities and helping out Germany is not one of them. This will severely affect German refinery logistics, most specially at Gdansk.

Baltic & North Sea ports

Rostock is a not-fit-for-purpose port with only tanker berth No. 3 which accepts crude oil with handling & unloading equipment also very limited. So upgrading and retrofitting is urgently needed plus specific dedicated facilities for storage and delivery capabilities. Also, Long Range (LR) 2 vessels are the maximum size accepted by this Rostock berth, thus limiting crude unloading volumes by each vessel. Furthermore, Wilhelmshaven (North Sea, Germany) and Gdansk (Baltic, Poland) also require dedicated storage + equipment for rather smallish yet frequent deliveries plus dedicated outbound logistics to Rostock port storage terminals which would be the only hub available in such area.

Rostock port in turn needs berth revamping for larger oil tankers from Wilhelmshaven or elsewhere plus dedicated equipment for larger, more frequent seaborne batches. Also required are logistics for internal delivery via inland waterways + rail + road inbound to both Wilhelmshaven and Gdansk dedicated storage terminals with additional linkage to the Rostock – Schwedt pipeline as the refinery just chews up unbelievable volumes of crude oil every day.

Both Wilhelmshaven and Gdansk despite already being large deep well-furnished ports still also require modifications.

Argenschwedt blues

Germany and Poland have also “volunteered” by Christmas 2022 to substitute Russian oil today delivered to both thru the Russian North Druzbha pipeline branch only for a few more months. This means — among many other impossible projects already described in detail — to find a solution for adequate feedstock delivery to Europe´s largest and most politically important refinery namely the troglodyte monster Schwedt that only T-Rex Russian oil can feed. So say no more and refer to fully seasoned Ref #7 whereby the more than obvious ´Krautensuiciden´ is described in detail. Just as teaser, please be advised that the Schwedt refinery “solution” goes far beyond Baltic and North Sea ports deep modifications. It necessarily also includes the Rostock-Schwedt pipeline enlargement, upgrade, and revamping, a real-life mission impossible under current circumstances where ALL of Europe is turned upside down indefinitely while it still needs to consume what is still being normally produced until today with superb Russian oil perfectly matching all current and future refinery needs. Please allow

me to repeat myself: It´d be like trying to change all four tires while the car keeps on running non-stop at 100 km/hr.

So don´t cry for Argenschwedt, but be reminded of the required new oil feedstock definition, testing and vendor selection, approval, certification & contract + retrofit and full revamping modifications per Option (3) + enhanced storage facilities + handling equipment for large & frequent batch deliveries. Without very deep and years-long modifications of the Rostock port, the Schwedt refinery will starve to death. And without the Druzbha door-to-door Russian oil feed — besides the poor quality of the non-Russian oil substitute and its probable non-matching with the pertinent technical requirements — the Schwedt refinery would chew up the largest possible Suez tanker in just 4 (four) days. Still, this is impossible today at Rostock port so a string of dozens of far smaller tankers would have to cue up like school children at the infamous berth No.3 the only one apt for oil handling and unloading onto yet to be resolved storage and transmission lines to the Schwedt terminal…and then onto the obsolete 1963 Soviet era pipeline today way too small to make any difference thus badly needing urgent enlargement. Europe has obviously gone full bananas trying to unnecessarily do all of that and plenty more by Christmas. This very bad idea should not end well.

And pray that trying to execute the required modifications with such an unbelievably tight and impossible schedule does not mean – as usual — any physical injuries directly or indirectly to anyone involved in new feedstock lines and infrastructure, an atmospheric distillation facility, a vacuum distillation system, a cat-crack unit, a visbreaking facility, an alkylation unit, a catalytic reformer, an isomerisation unit, and a very important ethyl tertiary butyl ether facility.


An EU Russian seaborne oil ban will shrink the number of vendors and the volume of oil offered to Europe very significantly thus ruining the supply side of the EU oil price equation. The much lower the supply, the MUCH higher the price. With Russian seaborne oil banned, the potential European supply is much smaller both in number of vendors and/or of the volume available for bidding. An unnecessary procurement mess, a harmfull self-inflicted policy.

Russian Urals oil = cheap, unbeatable, un-subsidized, already fully amortized facilities, in-expensive operation

Unknown new oils = unknown, but definitely FAR more expensive with terrific freight, logistics, and final delivery costs.

Not low enough – let alone very high prices — means disrupting the EU and the world with inflation beyond imagination

The unit price would not include pay-back amortization or the many huge investments / modifications / reforms made.

This means that the real effective price would be even far higher if the required monumental investments are priced in.

Ref # 8

Ref # 9

Ref # 10


Russian Urals oil = proven, fully vetted high-quality homogenous blend, low in sulphur, light- intermediate API gravity.

Unknown new oils = wishy-washy-iffy, does not even exist, will mean an engineering-chemical-logistics nightmare that does not bode well, and which will necessarily be heterogenous with batch to batch variations. A lower or mis-adapted oil quality would mean poor performance and operational risks with serious breakdown troubles and injuries plus down-time probably beyond repair at refineries, processing plants and final end use One single ‘bad’ batch would produce never ending down/time impact, damages, repairs, claims, potential accidents with possible injuries, non-compliance and altered delivery schedules, liabilities everywhere. It has happened before with non-Russian oils.


Russian Urals oil = unlimited, smooth, on-demand.

Unknown new oils = chances are that there is no enough volume available, not even in Africa, let alone Iran.

It´d also have to be “incremental” export volumes beyond current production for two reasons: one would be potential growth in EU demand and the second reason is that no vendor will leave traditional customers abandoned high & dry just because the EU has now gone bananas. Furthermore, these contracts could might all turn out being short-term ephemeral un-sustainable ´purchases of convenience´ with no future. Not enough and well delivered quantity means degraded European livelihoods and failing economy, with shut down plants and refineries affecting everything. Price would go up. Meanwhile, India increases its purchase of Russian seaborne oil by 25 times, that is 2500%. Just sayin´.

Ref. #11


Russian Urals oil = efficient, well known, reliable with excellent guaranteed performance for decades allowing to refine with excellence a range of products including petrol (gasoline) diesel, aviation turbine fuel, LPG, extra light heating oil, heavy fuel oil, bitumen, benzene, toluene, xylene and sulphur.

Unknown new oils = fully unknown, risky, requires carefull constant testing of all-around refinery modifications (details on that later) adapting internal processes to new yet unknown oil blends required to remain constant for at least 30 years, preferably 50 years. No data possible yet. Lots of work yet to be done. Refinement process jeopardized, final distillates quantities and qualities unknown. Politicians believe that technical problems will always be solved by technical people. And though saying that contains a grain of truth, what about time, money and human resources ?

Technical people are not magicians.

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matched & mated

Refineries are very closely matched and subtly calibrated to very specific and foreseeable supply feedstocks which are also very difficult to substitute and with great uncertainty regarding the final outcome. Changing anything either on the refinery side as well as on the feedstock requires lots of time, effort, money, dedicated facilities, experimentation, mistakes, trial & error, specific expertise, risk, and most important fixed, unchanging feedstocks always complying with specs. It´s not a “plug & play” substitute.

This means that Russia today supplies Europe with specific Urals oil that would be almost impossible to get from unknown third parties fast enough and cheap enough in enormous quantities. A very delicate and tight matching has already achieved between the European industry and reliable, vetted, well-known Russian oil vendors.

Ref # 12

first-hand SKovacs

Many EU refineries have been built to process certain types of oils found in Russia. The very design & build of these refineries was based on certain specific oil types within narrow variation in blend/quality and steady supply — variation normally of less than 15% vol/day — guaranteed for over 30 years (most commonly 50+ years). Obviously enough, the continuous supply of quality feeds is critical to the operation of a refinery or any chemical plant.


Adapting an EU refinery to new types of oils requires detailed laboratory knowledge of the new blend with constant composition and formal guarantees for its continuous delivery for decades, convoluted & lengthy contracts and procurement processes, extremely detailed engineering plans, manufacturing of parts, shipping, installation, testing, commissioning, optimization, permitting etc. etc. etc. before it can be declared “done”. Any element of this incomplete list, if missing, renders the whole affair a failure both technically and economically.


The above assumes guaranteed efficient and continuous shipping and receiving network(s) are always in place and fully operational (!) Such work involves thousands of people, complex processes and of course many billions of euros, regulatory permitting process, inherent lawsuits etc., i.e. A LOT OF TIME – years. If Europe were also deprived of oil + metallurgical coal from Russia — and also iron ore — is unlikely to build much. Never mind the finer components that require other alloy metals which are also provided by Russia… Ref # 13

length of contract

Russian Urals oil = 50+ years, Made-In-Russia will be missed.

Unknown new oils = can´t know, but for decades-long contract requires mammoth reservoirs such as Russia has.

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Christmas 2022

Every European refinery and chemical process plant affected (say, 65%) will now immediately require modification of internal processes adapted to new unknown non-Russian seaborne oils. This re-vamping and retrofitting will consume humongous amounts of euros, human resources, expertise, trials & errors, risk and lots of hard work and lots and lots of time. Plus all sorts of sensors, software & firmware modifications and purchase of new equipment. Unbelievably, Christmas 2022 is the simultaneous deadline for all of the above. Schedule non-compliance could lead to outward chaos by continuous damage beyond repair of machinery, processes, sensitive devices and installations that EU plants currently have in place. No equivalent madness has ever been planned and implemented except for enemies.

Apocalypses now

So the goal is to simultaneously modify all affected European chemical plants and refineries by adapting them to whatever non-Russian feedstocks of whatever quantities (better find enough…) quality and variations are effectively found, contracted and delivered by yet-unknown non-Russian vendors willing and able to deliver to Europe under current circumstances… Geopolitics anyone ? So the name of the game is to modify, adapt, retrofit for non-Russian substitutes of unknown origin with yet undefined all-around characteristics nor vendor track record. These oils would all be different and obviously not interchangeable. Possible storage and delivery cross-contamination are not allowed. Impossible having a “toggle-switch” for alternate feed of different oils to the same piece of equipment. No way.

Also this mammoth undertaking would have to be done without Russia´s accommodation meaning it´d be utmost difficult to phase-out of Russian Urals oil as gradually as needed while new non-Russian blends phase-in… while the rest still awaits modification thus still requiring Russian oil grades which Russia would not supply in the way that Europe would need to keep importing. Russia would have other priorities, not accomodating for European needs.

The EU today has highly sensitive plants finely tuned and used to Russian high quality oil during decades. And no plant will run without continuous, foreseeably constant feed of the right quality product in large enough quantities which most probably will grow in time as demand increases. Europe is now trying to change that in 6 months by executing 11 (eleven) new and very complex and unexpected projects just for the Schwedt Refinery alone. No Pre-Feasibility nor Feasibility studies whatsoever. If this were not a very serious matter I would take it as bad joke.

No batch system in the whole wide world no matter how well designed and built – Swiss and Germans included– is anywhere comparable to a modern door-to-door pipeline such as Druzbha. Tankers have a costly service life if only for the regulation/inspection requirements. So they are a higher risk and higher cost. Also there are negative seasonal availabilities of hydrocarbons and shipping vessels types and sizes which means lots of negotiation, coordination, funding, expertise, risk, new fixed and variable costs and surprises from yet unknown trade and business partners, new procedures, modus operandi, brokers, insurance companies, etc. Can´t make this stuff up.

Human resources are probably the weakest link with tons of people missing with yet to be defined job descriptions, yet to be interviewed, hired, trained, teams put together, deployed, etc. Current operational and maintenance + staff & field personnel would probably demand being switched to other jobs… or will drag their feet… or would simply resign thus necessarily compounding the problem to uncharted depths. New, young, inexperienced hands do not help under these circumstances.

The Schwedt Refinery badly needs a 200 km. pipeline upgrade + revamping on a partially-buried heavy structure built with obsolete materials and technology commissioned in 1963 and already repaired many times. The old pipeline trace goes through highways and urban areas, pristine environments, rolling hills, valleys and ridges, forests, rivers, lakes, home to fish and wildlife with strong winds, rain and snow. People will not like all of that in their back-yards.

This new EU plan needs to cover absolutely 100% of all of Europe´s current and future oil consumption, not just a part. Because Russia now has other priorities and will no longer cooperate with and adapt to EU needs in any way.

So forget about gradual Russian oil substitution. It´d be the opposite. For example, and just to entertain the idea, even if eventually achieving constant delivery of 75% fully-compliant non-Russian oil… it´d still mean digging a 25% deep hole into Europe´s economy, which Russia will not help to solve by supplying the missing 25% oil. This and other important matters led to the title of this article. Europe now will either cheat & pay more or harm itself beyond belief.

My suggestion is get out of Dodge.

Ref # 14


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