Despite the European Union’s drastic measures to wind down imports of Russian oil, Moscow still has plenty of buyers — and at prices steep enough to keep government revenue high and its coffers flush.
Before the war with Ukraine, Russia sold about half of its 7.85 million barrels a day of crude and refined oil to Europe. But with the war and the E.U.’s vow to abruptly end its reliance on Russian oil and gas, the Kremlin has been benefiting from high world prices while looking for new customers and reorienting its export strategy toward Asia.
The windfall shows how hard it is to punish a major oil and gas power such as Russia when so much of the world — especially developing countries — depends on fossil fuels.
Even with “severe oil production cuts” expected this year, Russia’s tax revenue “will increase significantly to more than $180 billion due to the spike in oil prices,” according to Rystad Energy, an independent research firm advising investors. The figure is 45 percent higher than in 2021.
India buys Russian oil at >30% discount according to @washingtonpost.
Will the US impose secondary sanctions on its most vital ally in the Indo-Pacific?
If not, does that encourage moral hazard for other regional stakeholders like China? https://t.co/BVurjA4Sto
— Carlos Casanova (@carcasall) May 12, 2022