The surge in demand from Asia for discounted Russian oil compensated for the sharp decline in the number of barrels sold to Europe, blunting the effects of Western efforts to punish Moscow against the Ukrainian invasion and to the Kremlin. I keep flowing my income.
Most of the additional oil was sent to two countries, China and India. China’s oil imports in May rose 28% month-on-month to a record high, helping Russia overtake Saudi Arabia as China’s largest supplier. Most of the increase was directed to India, according to shipping data analyzed by market research firm Kpler. India takes very little Russian oil and brings in more than 760,000 barrels a day.
South Korea and Japan have cut Russia’s oil, but those quantities are only a fraction of what China and India are buying.
“Asia has saved Russia’s oil production,” said Viktor Katona, an analyst at Kpler. “Russia is approaching pre-pandemic levels rather than falling further.”
Russian oil is sold With a big discount Due to the risks associated with the sanctions imposed to punish Russia’s invasion of Ukraine. Still, according to the International Energy Agency, soaring energy prices have led to higher oil revenues in Russia, costing $ 1.7 billion more last month than in April.
It is not yet known how much Asia will continue to buy oil as Europe cuts off Russia’s energy, but this shift will keep Moscow at production levels and disobey analysts’ expectations that production will plummet. Was made. And it provided another sign of the support Russia is enjoying from China. Xi Jinping, China’s top leader, Offering to deepen cooperation With Moscow despite the invasion of Ukraine.
According to Kpler, Russia’s crude oil exports to Asia have doubled from about 1 million barrels per day before Russia invaded Ukraine to about 2 million barrels per day.
The combination of discounted Russian crude oil and higher prices in pumps is also Indian refiners are doubly profitableAccording to analysts. Some of the petroleum products re-exported by India were shipped to the United States, United Kingdom, France and Italy. According to the Finland-based Energy and Clean Air Research Center..
“These molecules, many of them in Russian,” said Jeff Brown, president of energy consulting firm FGE, about refined oils being re-exported to the West. “That’s the core tension. They want to punish Russia, but they don’t want oil prices to go up.”
Russia’s oil is an attractive outlook for other countries as the threat of inflation increases.South African Energy Minister Told Bloomberg His country was considering buying Russian oil to counter the soaring fuel prices.Prime Minister of Sri Lanka Told the Associated Press His country may have to rely on Russia.And Russia’s Filipino Ambassador Said at a press conference He told President-elect Ferdinand Marcos Jr. that Moscow could help the country with oil, gas and other energy sources.
However, although a complete European embargo on Russian oil will not be implemented Until the end of 2022The continent is still looking for other ways to punish Moscow in war.
“We must not forget that Europe is trying to further curb. Russia will find ways to circumvent the regulations, but the regulations will be even tighter,” said FGE Brown.