Russia’s war on Ukraine appears to be reconfiguring global oil markets. Data tracking shipments suggests that the share of Russian crude oil shipped to countries in Asia has increased since the invasion, as European imports have fallen.
In the last quarter of 2021, some 95 per cent of Russian oil exported via European waters through the Arctic, Baltic and Black seas stayed in Europe. In April and May of this year, however, that percentage was down to 59 per cent, according to the analytics firm Vortexa.
An increasing share of shipments are instead ending up in India and China.
This week, the EU agreed to sanction Russia for its actions in Ukraine. EU leaders agreed to block most Russian oil imports by the end of 2022. The ban, which will only apply to oil that arrives by sea (around two thirds of imports) will “cut off a huge source of financing for [Russia’s] war machine”, according to the European Council president, Charles Michel.
According to think tank Center for Research on Energy and Clean Air, Russia has exported more than €30bn worth of oil to EU countries since the start of the invasion – three times the value of its oil exports to China in the same period.
Russia may, however, be able to mitigate the worst effects of an EU oil ban by reorienting to Chinese and Indian customers. European and US sanctions have led Russia to increasingly look to Asian buyers who are reportedly purchasing the oil at discounted prices.