In response to Western sanctions imposed following its involvement in the Ukraine conflict, Russia has redirected the majority of its oil exports from Europe to China and India, according to Deputy Prime Minister Alexander Novak. The move comes almost two years after the European Union implemented an embargo on Russia’s seaborne oil deliveries.
Novak, responsible for energy policy, revealed in a televised interview that Russia’s oil exports to Europe have significantly dwindled, dropping from 40 to 45 percent to an anticipated four to five percent of total exports this year. Facing a loss of market share in Europe, Moscow turned its attention to other markets, particularly China and India.
“China, whose share of oil exports has grown to 45-50 percent, and India have become our main partners in the current situation,” stated Novak. Notably, India, which previously received minimal shipments, has evolved into a major buyer, with its share of supplies from Russia increasing to about 40 percent over two years.
Reports suggest that India has taken advantage of discounted Russian crude, refining it before selling to European customers, raising questions about the effectiveness of existing sanctions. While such transactions are legal, critics argue that they provide a backdoor avenue for Russian oil, undermining the intended impact of sanctions.
Amidst the challenges, Russia has also sought new markets for its natural gas exports as it reduced exports to EU nations, prompting these countries to explore alternative suppliers.
Despite facing multiplying sanctions throughout 2023, Novak expressed confidence in the resilience of the Russian energy industry. He projected that Russian oil and gas revenues would reach almost nine trillion rubles ($98 billion) this year, a level comparable to pre-offensive figures in 2021. The oil and gas sector contributes significantly to Russia’s economy, constituting 27 percent of the gross domestic product and generating 57 percent of export revenues.
Novak affirmed Russia’s openness to diverse buyers, citing interest from Latin American countries, African nations, and other countries in the Asia-Pacific region. The geopolitical shift in oil exports underscores Russia’s adaptability in navigating the complex landscape of global energy markets amid ongoing geopolitical tensions and economic sanctions.
For more updates stay tuned to FELA News
