The Independent writes in its article that India’s imports of Russian crude oil more than doubled in 2023, while the EU’s imports of refined oil from India grew to record levels the same year.
In 2023, India became the world’s leading importer of Russian crude oil, according to Kpler market data analyzed by The Independent, importing an average of 1.75 million barrels daily. This became a 140% increase in 2022 compared to 2021. At the same time, the EU’s import of refined products from India soared by 115%, from 111,000 barrels per day in 2022 to 231,800 barrels per day in 2023.
“It has worked two-fold – India has been able to buy cheap oil for its refineries, then it has been able to refine that oil and sell the refined products at full price, and into a market (Europe) that is willing to pay up for them because it desperately needs to replace the loss of Russian material that it has applied sanctions on,” Kpler’s lead analyst Matt Smith, told The Independent.
EU, the G7, and Australia tried to prevent Putin from using oil money to fill his war on Ukraine by enforcing tough sanctions on Russian oil, including a $60 per barrel price cap on Russian sales to other countries. EU, the G7, and Australia don’t allow their companies and infrastructure to ship Russian oil if it is sold above the price cap. However, according to Ukraine’s Black Sea Monitoring Group, EU shipping companies did not always follow this ruling.
Oil trade tracking companies say it is impossible to distinguish which refined products originated from Russian materials once refined in another country. However, tracking the imports of crude oil and export destinations of refined products from specific facilities can give a fair idea.
The Independent writes that the Jamnagar Refinery in the Gulf of Kutch on India’s western coast was one such example. The Reliance Industries-owned refinery received 34% of crude oil imports from Russia. In 2023, it received 400,000 barrels daily from Russia and around 770,000 barrels daily from elsewhere. Around 30% of the refinery’s exports in 2023 headed to Europe.
The lack of effective sanctions allows Russia to finance its war against Ukraine indefinitely. Russia has increased military spending in its 2024 budget by 68% compared to the 2023 budget.
At the same time, Ukraine managed to increase military spending in the 2024 budget only by 17% compared to 2023, allocating almost all available money for defense. Ukraine spends 100% of national and 81% of total taxes on defense, relying heavily on external financial aid to cover non-military spending such as healthcare or education.
Only in the first year and a half of Russia’s full-scale war against Ukraine did Russian revenue from fossil fuel exports exceed 400 billion euros. This colossal flow of money has made it possible for Russia to put its economy on a war footing and increase the production of weapons against Ukraine.
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- A call from Kyiv to Davos: curb Russian oil and gas exports for peace in Ukraine and beyond
- Reuters: US treasury officials to visit Europe to discuss Russian oil price cap enforcement
- Russia circumvents oil sanctions, outsmarting the West