Russia-To-Asia Pipeline Takes Detour to US
Russian oil has taken an unexpected turn to the US, where it is making inroads on the West Coast. Oil refineries spanning the area between the Puget Sound in the Pacific Northwest and greater Los Angeles have been quick to try out oil that is landing in tankers sent from Russia's eastern coast. Imports have gone from zero to an estimated 100,000 barrels a day in a matter of months since a pipeline bringing crude from deep inside Eastern Siberia came online.
Mikhail Khodorkovsky, at the helm of Yukos Oil Company, was an outspoken supporter of a direct oil route to Asia before he was jailed and stripped of his oil assets, which went to Rosneft, a state-owned oil company. It was YUKOS that in 2002 arranged the first direct shipments of Russian crude to the US, across the Atlantic Ocean.
Traders have been caught off guard because the oil pipeline was built to target fast-growing Asian markets. Russia, which only recently joined the list of the top oil exporters to the US, is set to climb those rankings thanks to the Eastern Siberia-Pacific Ocean pipeline (ESPO).
Russia is the world's No. 1 crude-oil producer and No. 2 exporter after Saudi Arabia. The Russian oil industry has been fraught with scandal for decades, which has raised questions about its ability to be a reliable supplier over the long term.