MOSCOW: Russia has redirected the majority of its oil exports away from Europe to China and India, Deputy Prime Minister Alexander Novak said on Wednesday. This shift comes nearly two years after Western sanctions were imposed on Russia following its military actions in Ukraine.
Western sanctions, including a European Union embargo on seaborne oil deliveries, severely impacted Russia’s oil exports to Europe. Novak, responsible for energy policy, stated in a televised interview, “We previously supplied a total of 40 to 45 percent of oil and oil products to Europe. This year, we expect the figure not to exceed four to five percent of total exports.”
As Russia lost a significant market share in Europe, it turned to alternative buyers, with China and India emerging as primary partners. Novak highlighted, “China—whose share (of oil exports) has grown to 45-50 percent—and India have become our main partners in the current situation.”
India, which previously received minimal shipments, has now become a major buyer. Novak noted, “In two years, the total share of supplies to India has increased to about 40 percent.” Reports suggest that India has been acquiring discounted crude from Russia, refining it, and subsequently selling it to European customers.
Resilience of Russia’s Energy Industry
While facing challenges with natural gas exports to EU nations due to reduced exports and sanctions, Russia has also been working on the Arctic LNG-2 project. Despite US sanctions on the project in November, Novak confirmed that construction was progressing, and shipments were anticipated in the first quarter of 2024.
Novak expressed confidence in the resilience of the Russian energy industry, noting that despite multiplying sanctions in 2023, he expected oil and gas revenues to reach almost nine trillion rubles ($98 billion) this year, a level similar to pre-sanction times in 2021.
Russia remains open to diversifying its customer base, with Novak stating, “There are a lot of people who want to buy Russian oil. These are Latin American countries, African countries, and other countries of the Asia-Pacific region.”
The energy sector continues to play a crucial role in Russia’s economy, constituting 27 percent of the country’s gross domestic product and contributing 57 percent of export revenues, according to Novak’s statements.