February 6 this year In January 2018, another EU embargo entered into force, according to which buyers from third countries must agree to purchase Russian petroleum products at prices not exceeding the imposed limits or accept the fact that the West will prohibit its companies from transporting and insuring these raw materials. However, as experts note, the sanctions imposed on Russia are not effective because the country has found new markets to compensate for the losses caused by them. What’s more – Russian oil is still present at European gas stations because the introduced bans do not apply to petroleum products from Russian oil produced in third countries.
Russia has found intermediaries in the export of hydrocarbons to countries applying sanctions. Among them is India, which increased its purchases from Russia the most. Interestingly, before the war in Ukraine, this country practically did not import oil or other fossil fuels from Russia. After Putin’s attack on Ukraine, Russian oil exports to India increased tenfold. Today, imports from Russia account for about a quarter of India’s total oil consumption. In 2021, the largest source of Indian oil imports was Iraq (with a share of 24%), currently Russia has become the largest supplier. This week, the Indian government announced it was giving up the dollar to buy Russian oil. Months ago, “experts” wondered where Russian oil from the Urals would go if Europe did not buy it … The substantial increase in Indian imports of Russian oil is explained by the prices Russia is forced to charge to continue selling it. Even before the European sanctions, oil from the Urals was overpriced by 30%. India is benefiting from the current market situation. Faced with criticism from some Western countries, Delhi points out that oil is essential to meet high domestic demand. “India’s oil production is low, around 40 million tonnes per year, while consumption is 220 million tonnes per year. In other words: we are a net importer,” the representatives of the Indian government point out. However, some of the Russian oil imported to India is then exported after being refined and sold for $100 a barrel. The country also exports petroleum products to the European Union, the United States and Australia, among others. India’s refining capacity is relatively small at 5 million barrels a day; that’s half as much as in China and three times less than in the United States. On the other hand, India tends to favor Southeast Asia for the export of its petroleum products over distant regions such as Europe, which is more dependent on the Middle East, or the United States for diesel supplies.
The US ALSO resells Russian oil
After the imposition of an embargo on Russian oil, the United States replenished its strategic reserves in order to limit the increase in prices at stations. By cutting off trade with Russia, the United States was left without a refined product that traditionally imported massively: vacuum gas oil (VGO). To replace its current source of supplies, the US is now turning to Indian refineries such as Reliance Energy and Nayara Energie, which are sourcing oil from Russia in bulk. While Reliance Energy buys around 600,000 a day barrels of oil from Russia, the United States buys 200,000 barrels per day of finished products from Reliance, mainly VGO. Some U.S. refiners are breaking down VGO into more complex hydrocarbons, as VGO is excellent for the production of transport fuels, especially diesel, which is now in high demand in Europe. The reorganization of oil circuits on a global scale shows that sanctions against Russia are ineffective. The aggressor still receives around €640m a day from fuel exports. And that’s not what it was about…