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The two biggest consumers of Russian oil now are China and India while Western countries impose sanctions and limit trade.
Russia has been selling its oil at a discount to eager purchasers in Asia while major oil-producing countries try to preserve world prices by restricting output.
This year, China’s purchases of Russian oil have varied, dipping in February at the beginning of Russia’s invasion of Ukraine before sharply increasing in the months that followed.
From a relatively low base at the beginning of the year, India’s imports of Russian oil have increased, hitting a peak in June and July and essentially holding these levels through to November.
Russia has been selling oil at a discount since March of this year, following the invasion of Ukraine. The major G7 economies’ intention to control the price at which Russian oil is purchased, backed by the EU and Australia, has generated uncertainty in global markets.
In March, China and India’s combined oil imports from Russia surpassed those of the EU’s 27 member nations. Since late November, there appears to have been a significant spike in Indian oil purchases.
Experts believe that if oil supplies remain unchanged in December, Russia might become India’s largest single supplier.
Discounted Russian crude has also been benefited by other nations. For instance, a serious economic crisis has been plaguing Sri Lanka. In addition, Pakistan has been negotiating with Russia to buy oil at a reduced price, but no agreement has been reached as of yet.
Following its invasion of Ukraine, Russia lost certain foreign governments and businesses as well as some of its energy export customers, which caused the price of its Ural crude oil to drop.
Russian Urals crude briefly cost less per barrel than Brent crude earlier this year, by more than $30. (the global benchmark). In September, the discount decreased to $20 per barrel less than Brent crude, but it rose once more in November to reach a discount of $33 per barrel.
The Indian government has justified its imports from Russia, claiming that it must buy oil wherever it is cheapest.
The U.S. government had been critical of these purchases, but it has since stated that it accepts India’s right to continue purchasing inexpensive Russian oil. In response to Ukraine’s incursion, the EU has halted all seaborne imports of Russian oil.
Moscow has stated that it will cease exporting to nations that join the G7 initiative to impose price restrictions.
