(Headline USA) China and India are buying up Russian oil at deep discounts as the Western boycott of Kremlin-connected energy continues.
Following Russia’s invasion of Ukraine, Western European countries that once relied heavily upon Russian energy scaled back or shut down completely their imports of Russian fuel. As a result, Russia has been shopping its oil elsewhere at a much lower price.
“All these Arctic crudes usually go to the EU but now they have to go elsewhere,” a Singapore-based trader told Reuters.
Two of the biggest buyers are India and China. Before Russia’s invasion of Ukraine, India was a small buyer of Russian crude oil. But now Russia has become India’s single-largest oil supplier as of November.
China has been able to negotiate even steeper discounts for Russian crude oil, with Russian President Vladimir Putin even bragging about his partnership with the Chinese Communist Party.
“According to the results of this year, Russia has become one of the leaders in oil exports to China,” Putin said last week.
Putin added that Russia overtook Saudi Arabia last month as China’s biggest oil supplier, and that Russia is China’s second largest supplier of pipeline gas and fourth largest of liquefied natural gas. In December, he added, shipments had been 18% above daily contractual obligations.
Russia has also banned oil sales to countries that abide by the West’s price cap, which they imposed as a sanction on Russia in response to Putin’s Ukraine invasion. Under the price cap, which took effect on Dec. 5, oil traders must promise not to pay above $60 per barrel for Russian seaborne oil if they want access to Western financing.
Putin slammed the price cap as one of sevearl “actions that are unfriendly and contradictory to international law by the United States and foreign states and international organisations joining them.”
