Russia has lost the Western sales market and supplies up to 90% of its oil and petroleum products to two Asian countries. However, delivery is very expensive.
After leaving the Western market, the Russian oil industry found itself in an unprecedented dependence in its history on two buyer countries – India and China. Up to 90% of Russian oil and petroleum products exports today go to these countries. The Deputy Prime Minister of the Russian Federation, Alexander Novak, announced this to the Russian Media.
He noted that before the war, dozens of countries bought Russian oil. Almost half of the exports went to Europe. But the EU embargo, which comes into force at the end of 2022, has deprived Russian oil companies of almost all of their biggest customers.
According to this year’s results, “no more than 4-5%” of Russian oil will be supplied to Europe, Novak said: “And here we are only talking about the remaining volumes supplied as a result of exceptions made by the European Union for some countries, such as Hungary, Slovakia, Czech Republic, for oil supplies through Druzhba.”
According to Bloomberg, at the end of November, India and China bought about 3 million barrels per day from Russia, and in the summer supplies reached 3.5 million barrels – a historical record, although before the war only 500-600 thousand barrels went to China. daily, and the exports to India are entirely nil.
The main problem remains logistics, said BCS analyst Ronald Smith: transporting oil to Asia takes longer and costs more, and because of sanctions and “price ceilings,” carriers need to pay more, and to maintain the price for the buyer, oil. companies have to give discounts.
That’s a “huge opportunity cost for Russian producers,” Smith said. Moreover, after a new wave of sanctions against the “shadow fleet”, they are rising again: the Urals grade discount reached $17 per barrel, although in October it was around $10.
By the way, oil and gas exports provide the Russian Federation with more than 20% of the national GDP and more than half of all export earnings of the economy.
Let’s recall that last week it became known that five tankers with Russian oil were stopped on the way to India after the introduction of American sanctions.
Earlier, the US Treasury sent letters warning of jail time in case of violation of the price ceiling for Russian oil to 30 companies that control up to hundreds of oil tankers.
The EU also announced a strengthening of control over Russian oil sanctions.
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Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.