Russia's oil exports: China and India are taking over, Europe is hardly relevant anymore

Russia's oil exports: China and India are taking over, Europe is hardly relevant anymore

According to a report by www.tagesschau.de, EU sanctions due to Russia's war of aggression against Ukraine have led to a diversion of Russia's oil exports. China and India are now the main buyers, while Europe hardly plays a role anymore. Russia has redirected almost all of its oil exports to China and India. The two most populous countries in the world are now responsible for the purchase of almost 90 percent of Russian oil exports.

Last year, the EU states imposed sanctions on Russia for the energy sector because of its war against Ukraine, including an oil embargo with exceptions for particularly dependent member states. As a result, Europe is playing an increasingly smaller role as an importer of Russian oil.

India, which had previously received almost no supplies from Russia, was able to purchase discounted crude oil from Russia, refine it and sell it to European customers, according to media reports. According to Deputy Prime Minister Nowak, Russia generated revenue of around 88 billion euros from its oil exports in 2023, at a comparable level to 2021. According to Nowak, the oil and gas industry accounts for 27 percent of Russia's gross domestic product and 57 percent of the country's export revenue.

Russia's gas exports to China have also increased, while EU countries continue to purchase Russian gas through some smaller pipelines and liquefied natural gas. Around half of Russian LNG exports currently end up in EU countries.

The market implications of this diversion of Russia's oil and gas exports are manifold. Europe is losing influence as an importer of Russian energy raw materials, while China and India are becoming more important. This could lead to long-term geopolitical and economic shifts, both for Russia and for affected importers. Geopolitical tensions and sanctions could also lead to such diversions and restructuring in the energy landscape in the future.