By Prejula Prem and Sharon Cho (Bloomberg) —
Russian oil is still powering Europe – only with the help of India.
Already in December, the European Union banned almost all crude oil imports from Russia at sea. Two months later, it extended the ban to include refined fuels.
However, the rules not prevented Preventing countries like India from snapping up cheap Russian crude oil, turning it into fuels like diesel, and shipping it back to Europe at a premium.
The Asian country is on track to become Europe’s biggest supplier of refined fuels this month while also buying record amounts of Russian crude, according to data compiled by Bloomberg from analytics firm Kpler.
“Russian oil is finding its way back to Europe despite sanctions, and India’s increase in fuel exports to the West is a good example of this,” said Viktor Katona, the company’s senior crude oil analyst. “With India absorbing so many Russian barrels, it’s inevitable.”
The development is double-edged for the EU. On the one hand, the bloc needs alternative sources of diesel after ceasing direct supplies from Russia, its former main supplier. Ultimately, however, it increases the demand for Moscow’s barrels and means additional freight costs.
It also means more competition for Europe’s oil refiners that can’t Access to cheap Russian crude oiland comes amid a broader market probe into where the region’s diesel imports are coming from.
Josu Jon Imaz, chief executive officer of Repsol SA, said Thursday that Russian diesel is entering Europe illegally and called on authorities to crack down on these activities. He wasn’t talking about trade via India, but about flows of diesel that came from Russia.
A preliminary investigation into the matter by Spanish authorities found no evidence of Russian diesel entering the country, a government official said on Friday, adding that an investigation was ongoing.
Kpler’s data shows that Europe’s refined fuel imports from India will surge to over 360,000 barrels per day, just ahead of Saudi Arabia.
According to Kpler data, Russian crude oil arrivals in India are expected to exceed 2 million barrels per day in April, accounting for nearly 44% of the country’s total oil imports.
More than half of Russia’s seaborne oil shipments went to the European Union and the Group of Seven before the bloc began cutting purchases in early 2022 in response to the nation’s invasion of Ukraine.
–With support from Rodrigo Orihuela and Rachel Graham.
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