Russia-Ukraine war, Moscow’s oil revenues increased by 50% in the first months of 2022. “But the wind is changing”

Revenues made by Russia in the first months of 2022 from the sale of oil increased by 50% despite international sanctions, with the Kremlin collecting about $ 20 billion a month from the daily sale of approx 8 million barrels of oil and related products. This was reported by the Oil Market Report ofInternational Energy Agency. “Despite growing international pressure and declining oil production, Russian exports on the whole held up“, We read in the report which highlights however how since April the wind has been changing, in view of the deadline of May 15 to stop transactions with Russian state-owned companies.

“Now – notes the International Energy Agency – the main trading companies are reducing purchases in view of the deadline of 15 May for the halt to all transactions with state-controlled companies Rosneft, Gazprom Neft and Transneft ”. So “after a decline of about one million barrels a day in April, losses could rise to around 3 million of barrels per day in the second half of the year “. So far however the European Union has failed to find an agreement on a progressive embargo of Russian oil starting from 2023. The stop to Russian crude oil was instead decided by United States, Canada and Great Britain three countries that do though an appeal extremely small to the oil of Mosca. Specifically, Russian crude and refined products covered just 7% of US consumption, 11% of British consumption and nothing in Canada. On the other hand, the average of European countries is 34%.

However, Russia is trying to compensate for the drop in western demand diverting cargo to other countries. In these months India appeared particularly hungry for Russian oil which, due to the geopolitical context, is sold at lower prices than market prices. Unlike gas, which is more linked to physical infrastructures such as gas pipelines, crude oil travels mostly by ship and is therefore relatively easy to direct it to new customers. Russia is the third largest oil producer in the world after the United States and Saudi Arabia. It has reserves for 108 billion barrels and produces about 11 million barrels per day mostly exported. The price increases of crude oil (+ 53% compared to a year ago) also triggered by the war in Ukraine and although lessened in recent days, they have increased the flow of dollars to Moscow.

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