• Saturday, February 24, 2024

Business

Russia exports almost all its oil to China and India

By: Chandrashekar Bhat

ALMOST all of Russia’s oil exports this year have been shipped to China and India, deputy prime minister Alexander Novak said on Wednesday (27), after Moscow responded to Western economic sanctions by quickly rerouting supplies away from Europe.

Russia has successfully circumvented sanctions on its oil and diverted flows from Europe to China and India, which together accounted for around 90 per cent of its crude exports, Novak, who is in charge of the country’s energy sector, told Rossiya-24 state TV.

He said that Russia had already started to forge ties with Asia-Pacific countries before the West introduced sanctions against Moscow following the start of the conflict in Ukraine in February 2022.

“As for those restrictions and embargoes on supplies to Europe and the US that were introduced… this only accelerated the process of reorienting our energy flows,” Novak said.

He said that Europe’s share of Russia’s crude exports has fallen to only about four to five per cent from about 40-45 per cent.

“The main partners in the current situation are China, whose share has grown to approximately 45-50 per cent, and, of course, India… Earlier, there basically were no supplies to India; in two years, the total share of supplies to India has come to 40 per cent,” Novak said.

Speaking about the OPEC+ group of leading oil producers, Novak said Russia was sticking to its obligations on supply cuts and it saw the Brent oil price LCOc1 at $80-$85 per barrel next year, broadly in line with current levels.

The United States last month also declared sanctions against Arctic LNG 2, a liquefied natural gas project led by Russian company Novatek.

Fearing a backlash from the sanctions, foreign shareholders suspended participation in the project, renouncing their responsibilities for financing and for offtake contracts for the plant, the daily Kommersant reported on Monday (25).

Sanctions also resulted in Novatek declaring force majeure over LNG supplies from the project, industry sources said last week.

Novak said the project’s first train has effectively already started producing LNG with the first supplies expected in the first quarter of 2024.

Industry sources said the train had produced the “first drops” of LNG, but it will be some time before it reaches its nameplate capacity of 6.6 million metric tons per year.

(Reuters)

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