Australia
China
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
Russia’s invasion of Ukraine brought along a horde of economic sanctions on the country. In response, Moscow has been cutting gas supplies to Europe, but the bloc is on its way to completely banning Russian energy imports by December. While this is expected to impact the Russian economy, the country is now exploring Asia and the Middle East as potential markets for its energy exports.
Asian economies, dealing with high inflation, a strong US dollar and high energy prices, are lapping up Russian oil and gas due to the hefty discounts provided by sellers. Russia’s energy exports were largely concentrated in European nations, a market which accounted for more than 40% of the total Russian energy supply in 2021. However, the changing scenario has now put focus on Asia and the Middle East.
Russian energy exports to Asia
India and China have emerged as the biggest buyers for Russian oil, and the two countries now account for over 50% of all energy exports coming out of Russia.
China’s crude oil imports from Russia rose 28% in August compared to a year earlier. Russia is now the second largest supplier – Saudi Arabia took back its position as the top supplier of oil to China in August after four months, a period when Russia was dominating the Chinese market. China is Russia’s largest oil buyer as sellers extended discounted supplies to Beijing.
Imports of Russian oil to China totalled 8.342 million tonnes in August, nearly 1.96 million barrels per day (bpd), as per data from the Chinese General Administration of Customs. China spent a record-breaking $8.3 bn on Russian energy imports during the months of August. Since the war in Ukraine broke out, China has bought $44 bn of Russian fuel, customs data showed. The rising oil imports are also because economic activity is picking up in China after easing Covid-19 restrictions.
Meanwhile, India is also buying a bulk of Russian oil and gas. Russian President Vladimir Putin met Indian Prime Minister Narendra Modi at the Shanghai Cooperation Organisation summit in Uzbekistan and said that trade between the two countries was rising.
Shipping data shows that India has been picking up the East Siberia Pacific Ocean (ESPO) blend of oil from Russia. The world’s third biggest consumer and importer of crude oil, India has said that importing Russian oil is part of its strategy to manage inflation. Overall crude shipments from Russia to the country have jumped to between 12% to 13% of the total amount of overseas supply, compared to a mere 2% last year.
An OPEC report stated that India’s crude imports increased to 4.7 million bpd in June, of which Russia provided 0.9 million bpd. The report added that Russia was India’s top supplier of oil in June with a 24% share, surpassing Iraq (21%) and Saudi Arabia (15%).
Elsewhere in Asia, countries like Sri Lanka and Myanmar are eyeing heavy discounts provided by Russian suppliers as they struggle to contain the impact of inflation on their economies. Indonesia is currently considering the purchase of Russian oil, and Energy Minister Arifin Tasrif recently said that the country is open to buying cheap oil ‘from anywhere’ including Russia.
However, Japan has said it aims to phase out Russian oil imports even amid a power crisis in the country. South Korea on the other hand has seen crude imports from Russia decline. Thailand too has joined the bandwagon and has completely stopped imports of Russian oil. These countries are instead relying on Middle Eastern suppliers.
