By Dan Murtaugh and Debjit ChakrabortyBloomberg Posted on July 6, 202226 July 2022 Russia has collected $24 billion from selling energy to China and India in just three months after its invasion of Ukraine, showing how higher global prices are curbing US and European efforts to punish President Vladimir Putin. China spent $18.9 billion on Russian oil, gas and coal in the three months to the end of May, nearly double the amount a year earlier, the latest customs data shows. Meanwhile, India spent $5.1 billion in the same period, more than five times its value a year ago. That’s an extra $13 billion in revenue from both countries compared to the same months in 2021. The higher spending helps offset reduced purchases by the U.S. and some other countries that have halted or slowed purchases to punish Russia for the war. The bans have sent prices of alternative supplies skyrocketing and crippling inflation that threatens to push major economies into recession. “China is already buying virtually everything Russia can export through Pacific pipelines and ports,” said Lauri Myllyvirta, chief analyst at the Center for Energy and Clean Air Research, which has been tracking Russian energy flows since the outbreak. war’s. “India was the main buyer of the Atlantic cargo that Europe no longer wants.” That spree is unlikely to end soon, with energy prices much higher than they were at this time last year, even because of steep discounts to global benchmarks offered by Russia to lure buyers. On a volume basis, China’s imports continued a slow rise in June, while India may be motivated to boost purchases further in coming months as the European Union’s ban on Russian oil takes effect, Myllyvirta said. China and India continue to trail Europe as a bloc in terms of total sales this year, according to Myllyvirta research. However, Europe’s markets will continue to shrink as coal and oil import bans take effect and as Russia cuts gas supplies to some European buyers. Russia has long-standing trade and strategic ties with China and India, and along with offering steep price discounts is also accepting payments in local currency to help keep trade flows to the countries strong this year. China is the world’s largest energy importer and has dedicated pipelines for Siberian oil and gas. Although energy consumption was limited in the first half of 2022 – partly due to Covid-19 lockdowns – it spent much more on Russian energy due to higher prices and small increases in volume. India’s spending increase after the war was much more dramatic, as it shares no land border with Russia and its ports are usually too far for cost-effective shipping. The country spent $8.8 billion on oil and coal imports from Feb. 24 to June 30, more than it spent on all Russian products for the entire year of 2021, according to a Commerce Ministry official, who spoke on condition of anonymity because the data is not public. A spokesman for India’s commerce ministry had no comment. In addition to big jumps in oil and coal, India has also imported three cargoes of Russian liquefied natural gas since the war began, compared with one in the same period last year, according to Bloomberg ship tracking data. “Historically, India has taken very little Russian oil, but the war in Ukraine and the European Union’s embargoes on oil of Russian origin have led to a balancing of oil trade flows,” Wei Cheong Ho, an analyst at Rystad Energy, said in a survey . note last month. (Updates to add details to paragraph 9.) –With help from Stephen Stapczynski and Ruchi Bhatia.
