Russian Oil Exports Climb Ever-Higher

(Photo Credit: Waldemar/Unsplash)

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Russia may be falling short on the battlefield in Ukraine, but it’s running circles around Western regulators.

In April, Russia’s crude oil exports hit their highest volume since its invasion of Ukraine, according to the International Energy Agency. Around 80% of those exports went to China and India, and as Western nations consider another round of sanctions one EU official told the Financial Times that Russian oil being refined and resold by India could be next on the regulatory hit list.

Mixing It Up

Russia’s exports rebounded to pre-invasion levels in March, and April marked a new high on top of that recovery. Revenues remain hobbled by the G7 $60 price cap on barrels and overall drops in oil prices. Compared to a year ago, Russia’s oil export revenues in March were down 43%, according to a recent report from the International Energy Agency.

Still, Western officials see the increased flow to India in particular as a loophole-shaped problem:

  • The EU’s High Representative of the Union for Foreign Affairs Josep Borrell told the FT that Indian refineries are buying up cheap Russian crude oil, which is then synthesized into diesel or gasoline and sold to Europe.
  • “That India buys Russian oil, it’s normal. And if, thanks to our limitations on the price of oil, India can buy this oil much cheaper, well the less money Russia gets, the better,” Borrell said, but added: “if they use that in order to be a center where Russian oil is being refined and by-products are being sold to us […] we have to act.”

This closely mirrors concerns from G7 leaders over Russian diamonds, which are often polished in India, making their origins impossible to ascertain.

International Airspace: It’s not just Russian exports that are slipping through sanction loopholes. The New York Times got hold of Russian customs data that showed $14.4 million in American-made plane parts found their way to sanctioned Russian airlines over eight months last year. Sanctions-evasion, it’s a two-way sky.