How Russia trades oil with Asia
The imposition of severe restrictions on Russia, as well as the general geopolitical environment that is pushing many consumers to abandon Russian oil, all make the issue of reorienting its supply in Asia relevant.
Last year, Russia exported almost 1.7 billion barrels (bbl) of oil in total to 36 countries, three buyers less than in 2020.
China
Since 2017, it has been a buyer of Russian oil, 30.6% of which was supplied to the country in 2021. This corresponds to 514 million barrels. out of 3423 million barrels. Chinese oil imports, or 15%.
Indeed, according to information Reutersmajor Chinese oil consumers will not be renewing oil supply contracts in the coming months in Russia’s sharp position China on arrival to the new sanctions regime.
Therefore, Chinese state-owned companies cannot afford to limit the volume of oil. Even some of China’s independent refiners are moving into the shadows over emissions concerns. In particular, alternative payment mechanisms are being used to save oil from Russia.
However, in the baseline scenario, China still remains a consumer of Russian oil. In particular, in early February, Rosneft and Gazprom signed an agreement on additional supplies of energy resources with the China Petroleum Corporation (CNPC).
South Korea
It ranks second among Asian countries in excess of oil reserves last year in Russia – 99 million barrels. or almost 6% of Russian exports. For the country itself, this amounts to 10.3% of the total consumption of 958 million barrels. in 2021
At the end of February, South Korea announced that it was joining the anti-Russian sanctions of its allies, but it does not intend to introduce its own actions against Russia. However, in general, such a position of Seoul calls into question the preservation of Russian oil imports, even for the immediate goal.
Japan
Third place in Asia in terms of the volume of Russian oil imported in 2021 – 33 million barrels. or almost 2% of Russia’s total exports. This is 3.6% of the 909 million barrels purchased last year by Japan.
However, the country fully supported all anti-Russian demands, and also announced its desire to reduce dependence on preference for energy carriers from Russia.
India
It ranks fourth among Asian countries in terms of oil consumption last year in Russia – about 14.3 million barrels. or almost 0.85%. For India itself, this is also a small share in total oil imports, which in 2021 amounted to 1,533 million barrels. However, last month there were dramatic changes in oil trade between the two countries.
Oil exports to India quadrupled in March. According to the consulting company Kpler, since the beginning of March, Russia has already exported five batches of its oil to India – about 6 million barrels.
Indian media sources report that on February 24, India reserved about 16 million barrels of oil from Russia. All this is manifested in the redistribution of European energy flows after the escalation of the Ukrainian problem.
Previously, Indian companies bought small volumes of oil due to high costs. However, in the conditions of providing large discounts compared to market prices, oil imports of Russian oil become more profitable for India.
This Asian country intends to continue deliveries of our oil. In addition, Russia’s partnership with India relates to a wide range of interests, including geopolitics, and has been demanding for many years.
At the same time, India ranks third in the world in oil and energy consumption after the US and China. The country is developing a developing industry and, in general, a dynamically developing and developing economy, which implies a further increase in hydrocarbon consumption. All these are great prospects for increasing Russia’s exports to India and to the Asian direction as a whole.
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