Russia sent record amounts of cut price oil to China and India after its energy exports to Europe plummeted. Russian crude and fuel oil exports pouring into China have hit their highest level since the Ukraine invasion began, while also surpassing an April 2020 record, according to data intelligence firm Kpler. It comes after the EU moved to embargo oil imports from Russia as part of efforts to reduce its relaince on Russian energy.
The G7, the European Union, and Australia have also imposed a price cap on Russian crude oil at $60 (£49.50) per barrel.
The measures were aimed at controlling price spirals sparked by extraordinary market conditions while also stripping Russia of the revenues it had been raking in from oil used to fund its illegal war against Ukraine.
However, Chinese President Xi Jinping seems to have come to Russian President Vladimir Putin’s aid following the lifting of its strict zero Covid policy.
Russia’s overall crude and fuel oil exports to China hit a staggering 1.66 million barrels a day last month, data Kpler from February 20 said.
Indian orders for Russian oil also soared, hitting record highs in January. In total, Russian supplies accounted for around 27 percent of India’s oil imports last month as they reached a historic high of 1.4 million barrels per day, a 9.2 percent rise from December 2022.
Both China and India appear to be benefitting from the discounted price of Russian energy supplies, helping the Kremlin work its way around European sanctions as it diverts flows East.
Sushant Gupta, Asia-Pacific research director at consultancy Wood Mackenzie, told The South China Morning Post: “We do believe that China and India will process much more [of the] Russian crude that has been displaced from [the] EU.
“India and China’s purchase of Russian crude is helping to stabilise the global crude markets by providing an outlet for Russian crude.”
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Britain had even fully slammed the brakes on its Russian crude imports in response to the illegal Russian aggression in Ukraine before the EU’s December ban came into effect.
As Russia finds itself with alternative buyers, the EU has the challenge of finding alternatives to Russian oil too. In fact, it will need to find replacements for an additional 1.4 million barrels of Russian crude. Around 300,000 barrels per day could come from the US, while 400,000 may arrive from Kazakhstan.
Germany, the Netherlands and Poland received the highest volumes of Russian oil in Europe in 2021.
