In only three months after its invasion of Ukraine, Russia has made $24 billion from selling energy to China and India, demonstrating how higher global prices are thwarting efforts by the US and Europe to penalize President Vladimir Putin. According to the most recent customs statistics, China paid $18.9 billion for Russian oil, gas, and coal in the three months ending in May, about twice as much as it did a year earlier. According to Bloomberg, India spent $5.1 billion over the same time period, which is more than five times the amount.
China is the largest energy importer in the world and has specific pipelines for Siberian gas and oil. Despite the fact that its energy usage was reduced throughout the first half of 2022—partly as a result of Covid lockdowns—it paid much more on Russian energy as a result of increased costs and modest volume increases. Since sanctions were put in place against Moscow for its invasion of Ukraine on February 24, which Russia calls a “special military operation,” Indian refiners have also been snatching up cheap Russian oil, which has been spurned by western firms and nations.
Lack of new long-term supply agreements with Rosneft might force Indian refiners to purchase more costly oil on the spot market. Additionally, it shows that despite mounting pressure from Western sanctions to stifle Moscow’s earnings, Russia has continued to sell its oil. Three Indian state refiners—Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum—opened discussions with Rosneft for six-month supply agreements early this year after being attracted to the savings provided.
As part of its ongoing efforts to maintain strong commercial ties with China and India this year, Russia is taking payments in local currencies in addition to giving dramatic price reductions.
