Since the war of aggression in Ukraine, Russia has been increasingly subject to sanctions. In June, the EU undertook to stop importing Russian oil – but this regulation has loopholes, as a study shows.
The EU’s message was clear in early June: “Sanctions are among the EU’s most visible, immediate and effective response to Russia’s brutal and unprovoked assault on Ukraine’s sovereignty.” In the latest sanctions package, the salient element was the import ban on Russian oil.
Specifically, the EU statement said: “The package presented contains a total import ban for all Russian petroleum and petroleum products by sea. This covers 90 percent of our current oil imports from Russia.”
Even then, small loopholes were built into the ban: imports via oil pipelines are still possible, but oil can no longer be imported by ship. Also, the ban is subject to “certain transition periods” that “allow the sector and global markets to adapt.”
Since the beginning of the invasion: India, China, the United Arab Emirates and Saudi Arabia have been buying cheap Russian oil
And that’s not all: a study by the Finnish “Centre for Research on Energy and Clean Air” now shows that the sanctions can also be circumvented in other ways. Countries like India, China, the United Arab Emirates and Saudi Arabia have been importing more and more cheap oil from Russia – India then even processed the oil and sold it to the EU.
A lucrative business for India: Different types of oil are traded on the world market, with Brent Oil from the North Sea serving as a reference. When the price of Brent Oil rises or falls, other oil prices rise and fall by a similar amount.
Since the beginning of the war, this logic has been suspended for Russian Ural Oil: Compared to Brent, Ural Oil has lost 30 to 40 percent in value, so it has become significantly cheaper in comparison. Tempting for countries like India that have not joined EU sanctions!
India buys cheap oil from Russia and then exports it back
How much India rushes at Russian oil can be seen in Russia’s export shares: Before the invasion of Ukraine, just one percent of Russian oil went to India. Since then, the proportion has risen to 18 percent in May. The same picture applies to Indian refiners: the biggest importer is the Jamnagar refinery, which now gets 27 percent of its oil from Russia – up from just 5 percent before the invasion.
According to the Center for Research on Energy and Clean Air, more than 50 percent of the processed oil from Jamnagar then goes abroad.
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Source: Stern
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