Russia is the world’s largest exporter of gas and oil. According to the International Energy Agency, 45% of Russia’s budget in 2021 came from oil and gas revenues.
The EU has long been its best customer for both oil and gas. In 2021, the US Energy Information Administration claims that 49% of Russia’s crude oil exports went to OECD European countries. However, the war has pushed the EU to want to move away from Russian fossil fuels and Russia will need new customers.
Who will they be? Russia is likely to focus on existing non-sanctioned customers, such as China. In terms of oil, China is Russia’s largest non-European customer, accounting for 38% of Russia’s oil exports to Asia and Oceania in 2021.
China and India the main target of Russia
Russia is China’s second-largest oil supplier after Saudi Arabia, but experts believe the Kremlin’s main goal in the coming years will be to overtake its rivals in the Middle East to become China’s main oil supplier.
Another big goal for Moscow will be to significantly increase sales in India. The country of 1.38 billion people is the third largest consumer of oil in the world, the vast amount of which it must import.
Iraq, Saudi Arabia and the United Arab Emirates are India’s largest suppliers, and by 2021, Russia accounted for just 2% of India’s oil imports. However, there are signs of change. India has not condemned Russia’s actions in Ukraine and in March and April, Russian oil purchases from the country increased significantly.
However, there are doubts about the extent to which countries such as China and India can eventually replace European demand.
Cooperation with Moscow
Fernando Ferreira, a geopolitical analyst, says trade relations between the Middle East and countries like China and India took decades to cultivate. “I think both of them will be reluctant to completely close the door to Middle Eastern countries in favor of Russian oil,” he said.
In February, however, Beijing and Moscow announced a 30-year agreement to supply gas to China through a new pipeline. Payments will be made in euros. Russia has also established close gas ties with Pakistan.
Russia has agreed to build the Pakistan Stream, a $ 2 billion pipeline that will carry LNG from Karachi to the north of the country. Like neighboring India, Pakistan has not condemned Russia’s invasion of Ukraine.
Some European leaders, such as Hungary’s Viktor Orban, remain committed to the Russian gas market, but Serbia also seems willing to buy Russian gas in the future.
Arthur Sullivan
Edited by: Maria Rigoutsou.
Source: Deutsche Welle
Source: Capital
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