Russia Has Diverted Most Oil Exports to India, China

• Russia has diverted most of its oil exports from Europe to India and China, a top official said.
• The EU was the largest buyer of Russian crude oil and oil products, accounting for nearly half of the exports.
• The bloc has banned the import of Russian crude oil and products over the war in Ukraine.

Russia has overcome Western sanctions against its oil exports by diverting all the shipments east, a top Russian official said on Wednesday.

The European Union was the single largest buyer of Russian crude oil and oil products before the invasion of Ukraine, accounting for nearly half of such exports, according to a Reuters compilation of data.

However, the trade bloc started banning Russian crude oil and oil product imports from December 5 last year, aiming to target Moscow’s war chest and divert resources from its invasion of Ukraine.

This year, Europe’s share of Russian oil and petroleum exports tanked to just 4% to 5%, Alexander Novak, Russia’s deputy prime minister, said in an interview with Rossiya-24 television, as translated by TASS state news agency.

But Russia has managed to get around the sanctions by trading with other major markets such as India and China, Novak said.

In particular, India has become a major new export destination for Russian oil.

“There were virtually no exports to India before. Over the past two years, the total share of exports to India increased to about 40%,” Novak said.

By comparison, China’s share of Russian oil and oil products accounted for up to 50% of such exports last year, he added.

Novak said many other countries, including those in Latin America and Africa, are interested in buying Russian energy.

Russia expects its oil and gas revenues to reach 9 trillion rubles, or roughly $100 billion this year — down from 11.6 trillion rubles in 2022. Benchmark oil futures have fallen about 7% so far this year.

The Russian official also hit back at Western sanctions, calling them “illegal,” per the state-run media service TASS.

Novak said Russia’s experience in navigating sanctions in the last years proves that it can overcome such trade restrictions.

Russia’s diversion of its energy trade is contributing to its war chest as its invasion of Ukraine enters its 22nd month.

Russia’s economy has appeared to be resilient so far with the country reporting 5.5% GDP growth in the third quarter of this year. However, its official economic statistics are nearly impossible to verify and reports suggest that much of the country’s growth is due to massive military and government spending.