June 26, 2022

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Italy imports a lot of Russian oil

While you are in the European Union The need to stop importing oil from Russia is being discussedIn recent months, Italy has moved in the opposite direction to most European countries. According to data collected by financial timesThis month Italy imported 450,000 barrels of crude oil from Russia: four times the amount imported in February and the highest number since 2013. At this rate, Italy could soon become the largest European importer of oil transported by Russian sea, passing through the Netherlands.

This massive increase in imports is in large part due to the need to keep open the Lukoil Isap refinery in Priollo, in the Syracuse province, which is owned by the Russian oil company Lukoil and which, as an indirect result of war sanctions in Ukraine, must use exclusively Russian crude oil for its business.

The Priolo ESAPP Refinery is one of the largest in Italy. Currently, according to the data mentioned from 24 single substrate, it processes 13.6 percent of the total crude oil arriving in Italy (an average of 10.6 million tons per year), and then exports the final product worldwide. The Isab plant was built in 1972 and is owned by the Italian energy company ERG, which since 2008 has sold it to Litasco, a Swiss company controlled by Russia’s Lukoil.

Under normal circumstances, the Isab plant buys crude to be refined from producers around the world: about 30% comes from Lukoil, the Russian parent company that also has extensive mining operations, while the rest comes from other suppliers. The sanctions imposed by the West on Russia due to the invasion of Ukraine, however, changed things: although Lukoil was not directly punished, all major global banks stopped giving Isab credit and guarantees for the purchase of crude oil from abroad, for fear of doing so. From being involved in financial activities can be punished.

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In this way, ISAB found itself unable to purchase crude oil, and began importing 100 percent of its crude oil directly from Lukoil, dramatically increasing Italian imports of Russian crude: currently, two-thirds of the oil. The Russians who arrive in Italy end up at Isab, wrote financial times. According to company representatives, without Russian oil, the plant would be forced to close.

In this way, Italy is in a very uncomfortable position. Increasing Russian oil imports is in direct conflict with the European goals, also shared by the Italian government, which stipulate the need to stop energy imports from Russia in response to the invasion of Ukraine. But doing so without a proper solution for Isab would undermine a fairly large part of the local economy: Isab has about a thousand employees and a relatively large turnover, and its shipments make up a large part of the nearby port of Augusta.

It is not yet clear what the government intends to do: the Ministry of Economic Development is studying this issue, while the governor of the Sicily region, Nello Musumesi, has asked to do everything to keep the plant open. Among the possible solutions, there might be nationalization, a hypothesis that the government currently rejects but which the press often cites: the state would control the plant for a few years, and then sell it to a new buyer.

However, the problem of Russian refineries in Europe concerns not only Sicily. again according to financial times Imports of crude oil from Russia also increased in the port of Trieste: this time it was not used to operate domestic refineries, but there are two refineries of the Russian state company Rosneft located in Germany, to which the port of Trieste is connected by oil pipelines. .

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