On top of this, rising global crude prices, which have currently settled at around $100 a barrel, have sent Russia’s oil revenues sky high.
Sales are booming in Russia’s export market, the world’s largest in crude and refined fuels. And new trade arrangements have given President Putin cover to use natural-gas exports as an economic weapon against Ukraine’s European allies. Before the war, Russia supplied Europe with 40% of its gas. It has since throttled flows through the Nord Stream pipeline to Germany and other conduits, driving prices higher and putting pressure on European households and businesses.
Oil revenue more than makes up the difference. “Russia is swimming in cash,” said Elina Ribakova, deputy chief economist at the Institute of International Finance. Moscow earned $97 billion from oil and gas sales through July this year, about $74 billion of that from oil, she said.
According to data from the International Energy Agency, Russia pumped 7.4 million barrels of crude and products such as diesel and gasoline into the global market each day in July alone. The figure is down only about 600,000 barrels per day since the start of the year.
Russia has managed to find “new buyers, new means of payment, new traders and new ways of financing exports,” the WSJ reports, citing oil traders, former Russian industry executives, and shipping officials.
As soon as Western buyers and their Pacific allies opted to cut back imports of Russian oil, most of the volumes were redirected to Asia and the Middle East, where countries have decided not to take sides in the Russia-Ukraine conflict.
Indian companies went from near-zero Russian oil imports to almost a million barrels per day. State-owned Indian Oil signed a contract with Rosneft to lock in supplies until 2028.
“Russian oil will find its new way into India, China and other markets,” Evgeny Gribov, a former executive at Lukoil PJSC, said, as quoted by the WSJ.