Russia neutralized the oil embargo by “marketing oil” / The growth of Russian oil exports to 3 countries

According to the economic correspondent of Fars news agency, with the outbreak of the war in Ukraine on February 24 this year, the United States and the European Union imposed sanctions on the Russian oil industry in order to reduce the amount and income of Russian oil exports by imposing restrictions, thus causing serious damage to this country. enter

But according to the statistics of Vertexa shipping analysis company (picture 1), Russian oil exports did not decrease significantly and remained almost at the previous levels. According to Vertexa’s report, although European and American countries have reduced or stopped oil imports from Russia by imposing sanctions, Russia has been able to compensate for this gap by increasing oil exports to Asia and the Middle East.

Image 1

Now the basic question is, with what solutions has Russia been able to resist Western sanctions and secure the flow of its oil exports?

According to studies, Russia has implemented three basic strategies under the policy of “oil market creation” and succeeded in making the Western oil sanctions ineffective.

* Russia became the largest oil exporter to this country with a strategic partnership with China

Strategic partnership has been the first strategy of Russians to increase their oil exports. The strategic relations between Russia and China caused the Russians to become the largest exporter of oil to China after the imposition of oil sanctions, a solution that Iran has followed by signing a 25-year document with the Chinese has caused the amount of Iranian oil exports to China to exceed Implementation of the JCPOA.

Reuters news agency in a report entitled “Russia is China’s top oil supplier for the 3rd month in JulyIt stated that the Russians have become the largest exporter of oil to China for the third month in a row (Figure 2).

Picture 2

Russia’s oil exports in the first 7 months of 2022 have increased by 4.5% compared to the same period of 2021 and have replaced Saudi Arabia as the first oil exporter to China. According to Reuters statistics, Russian oil exports to China in 2022 averaged 1.7 million barrels per day.

* Russian oil exports to Indian refineries increased 10 times

Buy demand was the second strategy of Russia to market its oil exports. According to the “demand purchase” strategy, the oil exporting country guarantees the flow of its exports to that country by becoming a shareholder in offshore refineries.

After the imposition of the oil embargo, Russia’s shareholding in Indian refineries came to the country’s aid, and Russia was able to change its oil export destinations from Europe to India.

According to Bloomberg, last year, Saudi Arabia was the second oil exporter to India after Iraq, and Russia was in ninth place. But now Indian refineries have become the destination of Russian oil and the country’s oil export to India has increased 10 times and reached more than one million barrels per day and has taken the place of Saudi Arabia in the market (picture 3).

Picture 3

Currently, India’s Vadinar refinery with a capacity of 400,000 barrels has become the main importer of Russian oil. The reason for this is Rosneft’s 49% stake in the operating company of this Indian refinery.

Of course, Russia is also a shareholder in several other refineries in India, and in this way, the oil market policy by becoming a shareholder in extraterritorial refineries opened the knot of Russian oil exports in the embargo.

In the 13th government, the demand buying policy made Iran move towards becoming a shareholder in Venezuela’s refineries, and according to Reutzer’s report, Iran’s oil and gas condensate exports to this country increased from zero to 200,000 barrels per day.

* Russian oil exports to Turkey more than doubled

Total Trade is the third strategy of the Russians to market oil and guarantee their oil exports under sanctions. In this method, the oil exporting country maintains its oil export flow by supplying its needed goods from the oil buying country.

Mohammad Sadiq Jokar, head of the Institute of International Energy Studies, explains about this method: When you import from India and we export oil in return, now this oil embargo becomes a concern of the Indian side. Why does this happen? Because if India does not buy oil from the country that exports oil, the balance of economic interactions between the two countries will be disturbed and that country will not buy goods from India anymore.

He continued: In this case, the issue of the oil embargo of the oil supplier country is no longer only related to that country and America, but it becomes the issue of the suppliers of Indian goods. As a result, the same Indian supplier pressures the Indian government to get an exemption from the US to buy oil from the supplier country so that the flow of Indian exports can be opened.

According to the Reuters report entitled “Turkey doubles Russian oil imports, filling EU void» Russian oil exports to Turkey have doubled and increased from 98 thousand barrels to 200 thousand barrels per day. Instead, Turkey has pledged to fill the gap left by European companies in Russia by exporting goods and equipment.

In total, Russia’s three basic actions by implementing the policies of “strategic partnership”, “demand purchase” and “breakeven trade” have caused the Western oil sanctions against this country to be neutralized, solutions that are also on the agenda of the 13th government.

end of message/