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Russia's Seaborne Oil Exports Plunge

Russia's Seaborne Oil Exports Plunge

Russia’s crude oil exports have plunged to…

French Industry Switches To Oil From Gas Amid Uncertainty Over Russian Supply

Major energy-intensive industries in France look to convert gas boilers to run on oil as French and European businesses prepare for another decline or a complete halt of Russian gas deliveries to Europe, Reuters reports.

No Russian gas supply would hit many energy-intensive industries in Europe, including in its biggest economies, Germany, France, and Italy.

Russia has already slashed gas supply via Nord Stream by 60% over the past month and has just started the regular maintenance on the pipeline that carries gas to Germany.

The two-week-long maintenance is set to end on July 22, but the EU member states are concerned that Russia may not restore supply via the pipeline once the maintenance period ends.

With these concerns in mind, industries across Europe and in France are accelerating plans to replace gas with oil and even coal to avoid costlier shutdowns.

"What we've done is we've converted our boilers, so they're capable of running on gas or oil, and we can even switch to coal if we need to," Florent Menegaux, chief executive at Michelin, one of the world's biggest tire makers, told a conference in France this weekend, as carried by Reuters.  

Related: Another Alaskan Oil Project Could Be Shelved Over Environmental Concerns

Bruno Le Maire, France's Finance Minister, said the industry needs to prepare for gas and power shortages. 

"Let's prepare for a cut-off of Russian gas," Le Maire was quoted as saying at the conference. "Today it's the most likely scenario."

On top of possible gas shortages, France has had issues with its nuclear power generation this year, which has reduced the available electricity supply in France and Europe and sent French power prices for next year surging. France's nuclear power generation accounts for around 70 percent of its electricity mix, and when its reactors are fully operational, it is a net exporter of electricity to other European countries. Prolonged maintenance at several nuclear reactors this year, however, means that France—and the rest of Europe—have less nuclear-generated power supply now. Moreover, power giant EDF warned last week that it might have to reduce nuclear power generation this summer because of environmental regulations as the water levels of rivers are low and water temperatures high.

By Tsvetana Paraskova for Oilprice.com

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