Despite the sanctions, Russian oil exports are increasing. Both China and India buy large quantities of crude oil at discounted prices – some are suspected to be resold to the West in processed form.
– India has a large refinery sector that refines Russian crude oil into fuel products that could in turn end up in Europesays Christian Kopfer, commodity analyst at Handelsbanken.
The EU, the US and several other countries have tried to reduce the demand for Russian oil – but the sanctions have not fully taken effect.
Russian oil exports ticked up in April to the highest level since the invasion of Ukraine. Exports increased by 250,000 barrels per day from March to April, landing a total of 8.3 million barrels of oil per day, according to the independent energy market watchdog IEA.
– It is clear that these are very important revenues for the Russian economy, there is no doubt about that, says commodity analyst Christian Kopfer.
Good deal for India and China
Russia’s export earnings rose by $1.7 billion to total $15 billion in April, according to IEA’s latest report. Revenues are still a good third lower than before the invasion of Ukraine, which is largely due to Russia being forced to sell the oil at a discounted price.
– The West’s aim with the embargo is to create less room for Russian oil revenues and, by extension, the Russian war machine. But then you see China and India who have no particular concerns about buying the Russian oil, says Kopfer.
Everything points to continued trading
India and China together account for over 80 percent of imports of Russian oil.
– There is every reason to believe that Russia will continue to increase exports. Then there is the question of whether you can put pressure on countries to buy less oil, but that is doubtful.
Pressure on countries that buy Russian oil will be one of the main topics when the heads of state and government of the G7 countries hold a summit in Japan over the weekend.
A large number of other countries are also specially invited to that meeting, for example Brazil, Indonesia and India.