Florence Jones
March 30, 2023
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Deputy Prime
Minister Alexander Novak claims that all Russian oil exports have been rerouted
to “friendlier” markets. (Photo by Maksim Konstantinov via Shutterstock) Russian energy minister Nikolai Shulginov claimed on Tuesday
that all oil exports affected by Western sanctions have been rerouted to
“friendly” countries. Shulginov said in an energy forum that “we have managed to
completely redirect the entire volume of exports affected by the embargo. There
was no decrease in sales”. A number of sanctions were imposed on Russia, including an
embargo on sea-borne Russian oil imports, following the invasion of Ukraine in
February 2022. Alexander Dyukov, CEO of Russian oil major Gazprom Neft,
predicts that 2023 will be harder for Russian oil than 2022 as the full weight of
Western sanctions are felt. Prior to sanctions, Russian oil accounted for 90% of EU oil
imports. However, the EU imposed a ban last month, almost a year on from
Russia’s initial invasion of Ukraine. A price cap was also placed on Russian
oil transported via sea, in line with the G7 meeting last year which came into
place last month. “Friendlier markets” Amid the sanctions, Russia has turned to allied or neutral
nations as new importers. Russian oil exports to India have increased by 2200%
since the introduction of sanctions according Russian Deputy Prime Minister
Alexander Novak. India is the primary importer of Ural Mountain seaborne oil
accounting for 50% of exports, with China, another key importer, coming second. Russia is a key ally of the Organisation of the Petroleum
Exporting Countries (OPEC) which includes Iran, Iraq, Qatar and the United Arab
Emirates among others. Novak told the energy forum that energy revenues accounted
for 42% of Russia’s federal budget in 2022, up from 36% the year before. He
insisted that the industry was stable despite Western sanctions, stating that:
“most of our energy resources have been redirected to other, friendlier
markets”. Despite his assurances, Russia cut crude oil production by
500,000 barrels per day this month, reducing daily output by 5%. According to the International Energy Agency Russian oil
export revenue fell sharply last month to $11.6bn, down $2.7bn when compared
with January.
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