(EnergyAsia, August 6 2014, Wednesday) — Western trade sanctions against Russia in their dispute over Ukraine are unlikely to have a significant impact on world oil prices given the combined influence of other major geopolitical events already in play now, said UK based consulting firm GlobalData.

Along with rising tensions between Russia and the West, the oil markets are also hostage to the conflicts in Iraq, Syria and Gaza, the continuing lawlessness in Libya and Nigeria, and the unpredictable state of discussion between Iran and the West over Tehran’s nuclear energy programme.

While Russia is one of the world’s largest oil producers pumping 10.9 million b/d, Carmine Rositano, GlobalData’s managing analyst covering the downstream oil and gas sector said it “is difficult to assign one specific event to impact oil prices.”

Russia exports about one million b/d of its crude to Europe through the Druzhba pipeline and another 900,000 b/d to Asia, mostly to China. It refines the bulk of about 5.6 million b/d for domestic consumption.

On a global scale, Mr Rositano expects the world’s oil refining companies to raise throughput by one million b/d this year from 75.7 million b/d in 2013, with China and the Middle East contributing the most.

GlobalData said China brought onstream more than 500,000 b/d of new capacity in early 2014 through the start-up of a 200,000 b/d plant in Pengzhou and a 240,000 b/d unit in Quanzhou along with a 90,000 b/d expansion of the Yangzi refinery.

“However, these higher refining throughput levels in China from additional capacity will be somewhat offset by an increase in maintenance activities during the second and third quarters,” it said.

The Middle East will also boost production by an average 500,000 b/d through the start-up of new refineries over the course of 2014.

Saudi Arabia’s 400,000 b/d Yanbu refinery, a joint venture between Saudi Aramco and China’s Sinopec, and the UAE’s 420,000 b/d plant are both scheduled to come onstream in the fourth quarter of 2014. Saudi Aramco’s joint venture 400,000 b/d Jubail refinery with France’s Total reached full operating capacity in mid-2014 after starting up in late 2013.

“The impact from higher runs will be minimal in 2014 and the full impact of higher runs will not be realised till 2015,” said Mr Rositano who expects the Middle East to use most of the new capacity to meet its own rising demand for diesel.

The new Saudi refineries will ship their ultra low-sulphur diesel to Europe to displace imports from Asia. However, Europe will still remain dependent on low-sulfur diesel imports from both Russia and the US.

Mr Rositano said Jubail exported its first ultra low-sulphur diesel (ULSD) cargo to Europe in February.

“The Middle East will flex its muscles by increasing ULSD exports to compete with the US and Russia for market share in Europe,” he said.