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Ukraine crisis: Who is buying Russian oil and gas?
India’s oil purchases from Russia have risen sharply, despite efforts by Ukraine and its allies to persuade countries around the world to distance themselves from Russia. Indian Prime Minister Narendra Modi met Ukrainian President Volodymyr Zelensky at the recent G7 summit in Japan, but there was little detail of what was discussed.
Western nations have cut Russian oil imports, and want to limit the amount of revenue Moscow earns from selling oil elsewhere.
How much Russian oil is going to Asia?
India’s imports of Russian oil rose from a very low base at the start of 2022, increasing significantly throughout that year. Russian oil now accounts for nearly 20% of India’s annual crude imports, up from just 2% in 2021, according to Indian state-controlled lender Bank of Baroda.
India’s purchases of seaborne crude from Russia have surpassed those by China. But China also gets nearly 800,000 barrels per day via a pipeline from Russia (in addition to imports by sea), although this is currently believed to be at or near full capacity.
India started buying up Urals crude selling at a discount after the invasion of Ukraine last February. But in recent months, its oil refiners have also shown increasing interest in Russia’s ESPO blend (East-Siberia Pacific Ocean).
China’s seaborne imports of Russian oil did increase in 2022, but then fell back before increasing again in the latter part of the year and early this year. Other countries have also taken advantage of discounted Russian crude.
Turkey has bought significantly more, and so has Bulgaria, which has an exemption from the EU ban on Russian oil to allow it to continue to import it by sea. Pakistan has also struck a deal with Russia to purchase discounted oil. But these do not match the quantities imported by India and China.
Cheaper oil is driving the flow to Asia
Following its invasion of Ukraine, Russia had fewer buyers, as some foreign governments and companies decided to shun its energy exports. At one point last year, Russian Urals crude was more than $30 a barrel cheaper than Brent crude (the global benchmark).
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