No open declaration of support a Putinbut China and India finance the War. Buying cheap oil from Russia offers both economic and political benefits. China can diversify its oil supply for national security reasons, while India can make billions by exporting refined products like gasoline and diesel. But undermining European and American efforts to isolate the Kremlin risks serious diplomatic consequences, which no country wants.
Putin, the Kremlin threatens Britain: ‘He will be the first to be bombed in the event of a third world war’
China and India finance the Russian war by buying half of the exports
China and India are also central to the direction of oil prices, with demand from their vast domestic markets and supplies from their massive refineries. Their purchases of Russian crude over the past few months have helped ease the pressure. On the other hand, the West has remained steadfast in its commitment to Ukraine, but a long period of high fuel prices and potential shortages in Europe could become politically uncomfortable. “One of the consequences of this conflict is a fundamental realignment of the global energy system, trade relations and geopolitical alignments, with China and India becoming more closely allied with Russia,” said Jason Bordoff, director of the university’s Columbia Center on Global Energy Policy and a consultant by President Barack Obama.
‼ ️As China and India buy Russian oil shunned by the West to force an end to the Ukraine invasion, Moscow is now earning more than before the war, writes The New York Times… 🤨👌 https: / /t.co/ rnH5VHXSY0
– Леонид Геннадьевич (@ leonelk855) June 25, 2022
Oil as a currency of war
Oil is the currency of war. It finances the bullets and rockets used on the battlefield in Ukraine. The West is attempting to curb the financial tap, in part by weaning Europe, Russia’s largest market, off its energy dependency through sanctions. Four months after the end of the war, Russian crude oil exports are down only slightly as sales to China and India have largely bridged the gap left by Europe. India and China bought about 2.4 million barrels of Russian crude a day in May, half of Russia’s exports. At least some are refined into diesel and other fuels and exported around the world, including to countries opposed to the invasion.
Gas, where does Italy come from now? The flow from Norway (via Griespass) now exceeds that from Russia
The discount from Russia
China and India bought at a 30% discount to the global reference price, a boon to both economies in a world battered by rising inflation. Despite the rebates, Russian oil revenues are rising as prices have soared to over $100 a barrel. The conversion has only just begun and the oil volumes are still relatively small. The real test of China’s and India’s willingness to buy Russian oil will come when sanctions take full effect. Europe’s ban on Russian crude oil and refined fuels like diesel will be phased in over the next six months, a trade that accounts for two-thirds of the continent’s purchases from Russia. China, the world’s largest oil importer, has played a major role in global energy markets for decades and is largely dependent on the Middle East and Russia for supplies.
Crimean precedent
This pattern emerged during Russia’s takeover of Crimea in 2014. As the West imposed sanctions on Moscow, Russian President Vladimir V. Putin flew to China to complete a natural gas deal that had been in the works for a decade. China negotiated a tough deal for cheap gas and thwarted Western efforts to isolate Moscow, but without approving its takeover of Crimea. Since the Russian invasion of Ukraine, China has been walking a fine line, at least publicly. Chinese state-controlled media and government officials have remained silent about Russian oil, and Chinese oil companies have followed the same cautious script. “Companies don’t want to be subpoenaed to be accused of aiding Putin’s war machine,” said Erica Downs, a senior researcher at Columbia University. China’s appetite should also have limits. China has traditionally sought to secure a variety of energy sources. And its relations with Russia have long been difficult, despite Chinese leaders’ vote for a friendship “without borders.”
India’s Rapid Transition to Russian Oil
Before the war in Ukraine, Russia accounted for about 1% of India’s oil needs. According to Kpler, a commodities data company, Russia is now poised to overtake Iraq as India’s top oil source this month. Russian exports to India will hit 1.15 million barrels a day in June — up from 33,000 barrels a day last year and around 600,000 barrels a day in March — while shipments to Iraq are at just over a million barrels a day, according to Kpler Day will sink data. With a solid refining capacity of five million barrels per day of fuel, India could absorb another 350,000 barrels of Russian oil, or about a third more than it currently imports, according to energy experts. India has already stopped buying oil from Mexico, reduced purchases from Nigeria and pulled out of Saudi Arabia and the United States.
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