How Russian Oil Continues To Flow Despite Sanctions

Restrictions are a weapon in the struggle to throttle Putin's war effort but energy products are making their way to the US and Europe via third countries, reports Shweta Sharma

- Shweta Sharma

Russian energy is continuing to flow into the US, member nations of the European Union, and other countries that have imposed the toughest sanctions on Moscow, potentially blunting the sting of sanctions designed to cripple the Kremlin’s ability to finance the war in Ukraine.

While a large number of Western allies have agreed to halt the import of Russian crude and refined oil products as punishment for Vladimir Putin’s invasion, other countries have refused to do so and are taking advantage of the crisis to score major discounts. India is arguably the prime example of this, with its imports of cheap crude oil from Russia increasing from zero in January and February to a record 950,000 barrels per day in June.

And at the same time, major Indian refiners on the west coast which is the leading destination for Russian crude are selling on huge quantities of refined products to the US and Europe, two leading oil analytics firms tell The Independent. Once India has processed the oil and sold it on, it is impossible to say exactly how much of the end product can be traced back to Moscow, but analysts agree that at least a “small percentage” will have started its journey in Russia and ended up in a country that has enacted Ukraine-related sanctions, though not necessarily specific to energy.

Petro-Logistics, a Geneva-based oil trade analytics firm, estimates in a report that 308,000 barrels a day of Indian oil products refined from Russian crude are being exported since the war began in Ukraine. Of that amount, it estimates that 113,000 barrels per day (37 per cent) are going to Asia, including some countries with sanctions on Russia, and 26,000 barrels per day (8.4 per cent) are going to Europe.