China and India buy so much Russian oil that Moscow now sells more crude oil than it did before it invaded Ukraine

China and India buy so much Russian oil that Moscow now sells more crude oil than it did before it invaded Ukraine

Sergei Karpukhin/Reuters

  • Russia̵[ads1]7;s crude oil exports have now surpassed the volumes reached before the invasion of Ukraine.

  • China and India account for about 90% of Russia’s seaborne crude oil exports, Kpler data show.

  • With Europe largely out of the picture, the two countries each buy 1.5 million barrels a day from Russia.

Russia has been able to navigate Western sanctions well enough to push oil exports above levels reached before the war on Ukraine – and new data suggests Moscow has China and India to thank for that.

In the first quarter, Russia’s seaborne crude oil exports totaled 3.5 million barrels per day compared to 3.35 million barrels in the quarter last year, and at the end of this, Russia’s war against Ukraine began.

China and India now account for about 90% of Russia’s oil, with each country taking an average of 1.5 million barrels per day, according to commodity analysis firm Kpler.

That’s enough to absorb the shipments no longer going to European nations, which used to account for nearly two-thirds of Russia’s crude exports. Europe now takes in only 8% of Russia’s oil exports, per Kpler.

“Both China and Russia benefit from discounted Russian crude, and benefit from the sanctions applied to Russian materials by other countries,” Matt Smith, lead oil analyst at Kpler, told Insider on Friday.

After China and India, Turkey and Bulgaria are the biggest buyers of Russian crude oil.

Even before Vladimir Putin launched his war on Ukraine, China was already a top buyer of Russian crude, importing 25% of its crude from the country in 2021. That has since climbed to 36%, Kpler data show.

India, the world’s third largest oil importer, relied on Russia for about 1% of its total volumes before the war, but now buys 51% of its oil from Russia.

The United States has led Europe and other Western nations in imposing sanctions and energy price caps on Russia, designed to maintain market flow while reducing Moscow’s export earnings.

Calculations from the European Central Bank show that the volume of trade between the euro area and Russia has halved since February 2022, and the bloc’s imports of Russian imports have seen particularly sharp declines following the bans on coal in August 2022, crude oil in December 2022 and refined oil products in February 2023.

The ECB chart below shows a similar pattern illustrated in Kpler’s data, with Russian seaborne crude exports moving towards Asian buyers and away from Europe.

Russian economy sanctions oil imports

European Central Bank, ECB Economic Bulletin

Admittedly, the revenue Russia generates from its energy exports has fallen along with the drop in prices, although volumes remain high.

The International Energy Agency said on Friday that Moscow’s revenues are down around 43% compared to the same time last year.

But oil prices are rebounding as China’s reopening economy drives demand while OPEC and Russia squeeze supplies.

Earlier this month, OPEC+ announced a surprise output cut of more than 1 million barrels per day, with Russia extending its withdrawal of 500,000 barrels per day until mid-2023.

Read the original article on Business Insider

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