Russia claims US sanctions have failed to curb its oil output
Breanne Deppisch
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Russia said Tuesday that sanctions packages adopted by the U.S. and Western allies have failed to restrict its crude oil shipments, and that it has redirected virtually all of its volumes to “friendly” nations in other parts of the world.
“I can say today that we have managed to completely redirect the entire volume of exports affected by the embargo. There was no decrease in sales,” Russian Energy Minister Nikolai Shulginov said at an energy forum on Tuesday.
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Rather, he said, Russia had been working to reroute its crude oil and refined products to buyers in Asia, Africa, Latin America, and the Middle East rather than the European Union, which had purchased more than half of its crude oil prior to its war in Ukraine.
Deputy Prime Minister Alexander Novak, who also spoke at the event, touted Russia’s energy industry as “sustainable” even in the face of the Western sanctions packages.
In 2022, he said, energy revenue accounted for 42% of Russia’s federal budget, compared to just 36% in 2021.
India saw its imports jump 22-fold in the past year alone, though he declined to specify volumes sold.
India also accounted for more than 50% of Russian seaborne Urals-grade crude exports for the month of March, followed by China.
Novak said that in the months ahead, Russia plans to focus on developing insurance tools needed to support its oil sales in the new market.
The remarks come as the U.S. led the charge for a G-7-backed oil price cap coalition aimed at limiting Moscow’s oil revenue.
Since the cap came into force in December, Treasury Department officials have maintained that it has been successful in achieving its twin goals of driving down Russia’s oil revenue while also keeping its barrels on the market.
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But getting a clear picture of the volumes that Moscow is shipping or the price point that buyers in China and India have been paying for Russian supplies is difficult.
Earlier this month, JPMorgan Chase forecast that Russia would be able to maintain its oil output at pre-Ukraine invasion levels of 10.8 million barrels per day, underpinned by strong demand from China and India, which it expects to increase by a combined 1 million bpd this year.