The Magazine for Asian Investors
Russian President Vladimir Putin may rely more on China and India after the European Union (EU) voted to support sanctions on more than two-thirds of the Russian oil imports.
There are few countries in Asia capable of refining the kind of oil Europe imports. EU leaders have agreed on a plan to ban imports of Russian crude by sea, which could cost Russia export revenues of up to $10 billion.
Russia may therefore have to look for a customer other than Europe to export Urals crude oil. This oil is very popular in Europe, but customers in Asia are limited because refining large quantities of such grades is difficult in countries such as Sri Lanka and Indonesia. Therefore, due to lack of expertise in processing and blending, they cannot process oils with high sulfuric acid content.
Russia must therefore turn to countries like China and India, which have refineries for processing Urals oil, to get rid of its oil.
Here, it remains to be seen how much oil China and India can still take, as they have already bought record quantities of Russian oil. Many European refineries have avoided importing Russian oil since the invasion of Ukraine at the end of February.