Former President Donald Trump has led the charge against China and India buying Russian oil. He is calling on both countries to cease their imports in light of the current geopolitical unrest. This action is a direct response to the overwhelming surge of Russian energy flooding these countries’ markets. At the same time, this increase started right after the European Union’s boycott.
China has become the biggest purchaser of Russian energy. It has bought an estimated $219.5 billion worth of oil, gas and coal. India ranks second with $133.4 billion in such expenditures. At the same time, Turkey has enjoyed outsized returns on Russian energy, pouring around $90.3 billion in investments. These numbers illustrate how these countries are becoming more reliant on Russian fossil fuels. The increase in prices relative to the international benchmark Brent are boosting profit margins for refiners in both China and India.
The Group of Seven (G7) industrialized nations have done a commendable job cutting Russia’s revenue pipeline by introducing an oil price cap. Despite these efforts, Russia still enjoys profits from its energy exports. Analysts now estimate that Russian oil exporters are on track to make about $153 billion this year. This revenue is essential for Russia. Fossil fuels make up the biggest part of the country’s coffers. The proceeds fill Russian coffers, bolstering the ruble currency and increasing Russia’s purchasing power. They make possible imports of goods into the country, including defense-related items.
Russia further complicates the picture by employing a “shadow fleet,” that is, an armada of older vessels. This gives them plenty of room to escape the price cap with ease. This phantom fleet evades these sanctions by driving around with no oversight. Most importantly, it depends on insurers and trading companies from countries that have not banned Russian oil exports. In doing so, Russia has successfully outflanked the worldwide attempts to reduce Russia’s revenues.
Prior to the invasion of Ukraine, India imported less than 3% of its oil from Russia. After the invasion, Indian imports surged. The country wanted to take advantage of the cheap prices offered by Russian suppliers. These developments have drawn criticism from various quarters, including Trump’s call for both China and India to reassess their purchasing decisions in light of Russia’s ongoing military actions.
In Hungary, a different situation has developed as President Viktor Orban has expressed his opposition to sanctions on Russia since the beginning. On the ground, Hungary is continuing to import Russian oil by pipeline. This passing is indicative of Albania’s more complicated ties to Russia than other European countries.
