YPF banned the import of fuels of Russian origin

General 29 de mayo de 2022
The oil company led by Pablo González, which responds to CFK, announced that it will stop importing gasoline and diesel of Russian origin.

Although politically it is the first time that an organization or company controlled by Christianity joins the blockade against Russia, the decision responds to a commercial reason. What is YPF's explanation and how will they affect Cammesa and Enarsa, the two public companies that channel fuel imports, which for now have not received the same instruction.

YPF, the oil company controlled by the government, began to ban the import of fuel of Russian origin this week. This arises from a clause that the company included in the last tender launched this Thursday to acquire two shipments of diesel. Politically, the decision caught the attention of the market because the leadership of YPF responds entirely to the Vice President of the Nation, Cristina Kirchner, who avoided condemning the invasion of Ukraine by the Russian army.

From this logic, the exclusion of Russian suppliers from the verifications carried out by YPF to supplement the local fuel supply with imported products exposes Pablo González, president of the oil company, and front-line leaders of La Cámpora who are part of the high management of the company. More so if you take into account that Cammesa and Enarsa, the two companies also controlled by the government that are in charge of importing liquid fuels and Liquefied Natural Gas (LNG), respectively, continue to allow Russian representatives such as Gazprom and Lukoil participate in their tenders.

“They keep inviting them. But the traders told us that we cannot buy products whose origin or port of loading is Russia, Ukraine or Belarus”, explained an international supplier who regularly participates in the tenders of both companies.

Official explanation

YPF put out to tender this Wednesday two shipments of diesel. On Monday he had launched a tender to import gasoline. In the specifications, the company included a paragraph in which it vetoes the presentation of offers of products originating in Russia. “Specifically, and due to events that are public knowledge worldwide, YPF S.A. will not take into consideration offers related to products whose origin can be associated with the Russian Federation”, explains the final clause of these documents.

From YPF they explained to EconoJournal that the veto against Russia is due to the difficulties that the shipbuilding companies —which are in charge of contracting the ships, the purchase of fuel and the maritime agency of the same to guarantee logistics— are registering at the regional level. to deal with Russian products. In fact, directors of the oil company under a state majority detected several cases globally in which shipowners transporting fuels of Russian origin had problems carrying out their operations due to the economic penalties applied in the West after the invasion of Ukraine.

For this reason, with this measure, YPF sought to transfer to shipowners any responsibility that shipowners may incur for transporting Russian fuels. In terms of operations, the concern of the company is not to hinder the importation of fuels just at a time when the supply of diesel in the local market is still at a critical point due to record demand. YPF does not want a repeat of the scenario of two months ago, when the lack of diesel threatened to put the thick harvest in check.

Defensive position

YPF's defensive position has a degree of geopolitical realism. The United States and the European Union have been increasing restrictions on their trade with Russia and sanctions on the economy of that country. This includes the energy field, in which the United States has a more assertive position, while in Europe the negotiations are more difficult, given the relative dependence of each country on Russian hydrocarbons.

But sanctions and restrictions sometimes have ripple effects that transcend the borders of these countries and should not be taken lightly. At the beginning of May, the European Commission proposed to lock a total embargo on imports of Russian crude oil in the European Union, which until now did not prosper due to Hungary's refusal and its demands to guarantee an alternative offer to Russian oil. The proposal included a ban on shipping companies and European companies from providing services related to the transport of Russian oil in the rest of the world.

However, it is also true that many countries have not vetoed the import of Russian hydrocarbons, mainly because they are being sold at a discount price. In YPF's argument, the case of fuels is even more striking, given that the industry has expressed the objective restrictions that exist to identify the origin of processed crude oil.

Shell CEO Ben van Beurden explained that once a refinery outside Europe processes Russian crude, the final product enters the markets and it is virtually impossible to determine the origin of the crude used. "At that point, we don't have systems in the world to track whether that particular molecule originated from a geological formation in Russia ... that doesn't exist," van Beurden said. This explains why YPF sought to put the responsibility of the shipowners in the face of any inconvenience that may arise with the future importation of diesel ships.


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