Asia for the first time overtook Europe in terms of purchases of Russian oil

For the first time, Asian countries overtook Europe in terms of the volume of oil purchased from Russia, BLOOMBERG writes, citing estimates by Kpler analysts.

Over the past week, tankers have transported from 74 to 79 million barrels. Russian oil is almost three times more than in the period before February 24. Russian oil is supplied to Europe mainly through pipelines.

According to analyst Jane Xie, the volume of Russian oil rose to a record level in April, mainly due to increased purchases of India. “Some of the buyers in Asia are more interested in economics than in politics. However, the US is paying attention to Indian purchases of Russian oil, so there may be some downside risks to this trade flow,” she notes.

After the outbreak of hostilities in Ukraine, the EU countries began to discuss the introduction of a complete embargo on Russian oil, but it has not yet been agreed upon. An attempt to include it in the sixth package of EU sanctions against Russia ran into opposition from Hungary. European Commission President Ursula von der Leyen said that Brussels expects to stop importing Russian crude oil within six months, and from supplying petroleum products by the end of 2022.

The fact that if the European Union bans the import of Russian oil, Moscow will have to redirect exports to the Asian market, analysts interviewed by the Financial Times said in early May. At the same time, they noted that on the way of reversing hydrocarbon flows, Russia runs the risk of encountering logistical difficulties, in particular, a shortage of tankers. An example of such problems was described by REUTERS back in April, citing sources: according to the agency, the Indian Oil and Natural Gas Corp (ONGC) encountered difficulties in finding a vessel to transport 700,000 barrels of oil. Russian oil from the Far East. His search has become more difficult due to reputational risks for carriers and difficulties in securing insurance.

The damage from the loss of the European market may be partly offset by rising energy prices. At the same time, Asian countries are buying Russian oil at a significant discount. Thus, according to Bloomberg, at the beginning of May, Indian buyers were seeking the opportunity to buy Russian oil at a price below $70, while the price of the benchmark Brent oil at that time was $100 per barrel. As of May 27, a barrel of Brent costs $116.