MOSCOW: Hungary has increased oil imports from Iraq’s Kurdistan region at the expense of Russian crude in a sign that Middle East producers could be gaining ground in a battle with Moscow for global market share, according to trading sources.
This would also be the first confirmation of large Kurdish oil shipments to Europe as autonomous Kurdistan is locked in a standoff with Baghdad over lucrative exports and faces repeated sabotage of the pipeline carrying crude to Turkey’s Ceyhan port.
Hungarian oil group MOL receives the bulk of its oil imports from Russia. But it has stepped up imports of oil from Kurdistan since the summer, the sources told Reuters without giving specific volumes, part of a wider increase in seaborne crude purchases for the country’s main refinery, Szazhalombatta.
“These are serious volumes, almost 40 percent of Szazhalombatta’s needs,” a trader said of total seaborne imports.
The sources said this would inevitably involve a reduction in imports of Russia’s Urals blend, which come via the Druzhba pipeline.
MOL declined to say if it was buying blends from Kurdistan. It confirmed, however, that it was increasing purchases of blends other than Urals, but added that Urals would remain the main blend for its refineries.
The firm said it planned to ship in 12-18 cargoes of oil from sea this year, up from eight in 2014 and three in 2013.
Global oil prices have more than halved since June last year. Top exporter Saudi Arabia has refused to cut production as it guards market share, saying higher-cost oil producers would ultimately reduce output and help the market to rebalance
But U.S. oil output has proved more resilient than expected and Russia has continued to increase production in the past few months, further worsening the global glut. And Iraqi production has been also growing, both in the north and south.
