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Russia redirects oil sales to India amid sanctions against Ukraine – DW – 12/27/2023

Oil exports to the world’s two most populous countries, India and China, accounted for 90% of all Russian crude exports this year, Deputy Prime Minister Alexander Novak told the Russian Press on Wednesday. Russian public television channel Rossiya-24.

Novak, whose portfolio includes control of the country’s energy sector, said Moscow managed to circumvent the effects of Western sanctions during its invasion of Ukraine by redirecting its supplies mainly to the two Asian giants.

He said this process had already begun before the February 2022 invasion and the sanctions that followed soon after, but that U.S. and European restrictions had served as a catalyst.

“As for the restrictions and embargoes on deliveries to Europe and the United States that were introduced… this only accelerated the process of redirecting our energy flows,” Novak said .

He said the share of Russian oil exports to EU members had fallen to around 4 or 5 percent. By comparison, Russian oil exports to the resource-rich United States have always been very limited in scope.

Most, but not all, Russian oil exports to EU members have ceased since the invasion of Ukraine.Image: Yegor Aleyev/TASS/dpa/photo alliance

India, by far, the fastest growing market

Novak said China’s share of Russian exports had increased to around 45-50%.

But the deputy prime minister also said that of the two markets, it was India where Russian sales were growing the fastest.

“Previously, there were practically no deliveries to India; in two years, the total share of deliveries to India amounted to 40%,” Novak said.

The Guwahati refinery, operated by the Indian Oil Corporation, is one of the new buyers found by Russia.Image: BIJU BORO/AFP

India was even able to buy exported Russian crude oil, sometimes at a discount, refine it, and then resell it to Europe. This is partly possible because refineries often use crude from a variety of sources, making it difficult, if not impossible, to define the original provenance of the final product.

The EU’s top foreign policy official, Josep Borrell, told Reuters earlier this year that the European Union was both aware of the reported problem and was looking at ways to stop or limit the practice .

“That India buys Russian oil is normal. And if, thanks to our limitations on the price of oil, India can buy this oil much cheaper, well, the less money Russia will receive, the better,” Borrell said last March. “But if they use it to become a center where Russian oil is refined and its byproducts sold to us… we must act.”

Revenues similar to those of 2021, before the invasion, according to Novak

Deputy Prime Minister Novak also told Rossiya-24 on Wednesday that Russia is meeting its supply reduction commitments as a member of the OPEC+ group of oil-producing countries. He said he expected oil prices to be similar to current levels in 2024, around $80 to $85 (around 72 to 77 euros at the current exchange rate) per barrel.

Deputy Prime Minister Alexander Novak’s portfolio includes political responsibility for the Russian energy sectorImage: Sergei Pyatakov/ITAR-TASS/IMAGO

He predicted that revenues from Russian oil and gas exports would total nearly 9 trillion rubles (about $98 billion) for the year, a level similar to 2021, the last year before the invasion. Ukraine and the sanctions that followed.

The oil and gas industry accounts for about 27% of Russia’s GDP, according to Novak, and about 57% of its export revenues. He added that Moscow remained open to other buyers.

“A lot of people want to buy Russian oil. These are Latin American countries, African countries and other countries in the Asia-Pacific region,” he said.

Abundance of oil from Russia: ineffective sanctions?

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msh/rc (AFP, Reuters)

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