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    How Russia is Keeping Oil Flowing Despite Sanctions


    Russia has managed to keep its oil moving to world markets, despite sanctions imposed last month.[0] Seaborne flows of Russian crude rose for a fourth time last week to the highest level since June, helped by the diversion of volumes that were previously piped directly to Germany and Poland.[1] In the seven days leading up to February 3rd, the combined volume of Russian crude decreased by 135,000 barrels per day, or 4%.[2] Flows from the Baltic decreased drastically by 625,000 barrels a day, representing 32%, yet these losses were partially balanced out by increased Arctic and Pacific exports.[2] No change was seen in the shipments from the Black Sea compared to the week prior.[2]

    The Kremlin’s war-chest from crude export duties rose in line with flows, but the 16% increase in revenues was worth just $8 million, with the burden of taxes on Russian oil shifting from exports to production.[1] Since the beginning of the year, the number has increased due to Germany and Poland decreasing the amount of crude oil they were receiving through the Druzhba pipeline from Russia.[2]

    Figures from the Russian Finance Ministry cited by Turkey's Anadolu Agency indicate that Russian Urals crude was traded at $49.48 per barrel in January, which is a 42% decrease from its price one year prior. This is further compounded by rising transportation costs.[3] Russia has been able to sustain its high levels of crude exports thanks to large discounts, but how will it be able to continue exporting its refined products once the European Union's embargo goes into effect on February 5th?[4]

    Russian oil, which is relatively inexpensive, is being purchased in larger quantities by India and processed into fuel for Europe and the US, making India a more influential player in international oil markets.[5] Low-sulfur diesel flows to Europe were at 172,000 barrels in January, the most since October 2021.[6] Alternative markets — namely Turkey, Africa and Latin America — have so far shown limited interest in taking Russian products, and official figures from the Russian Finance Ministry have shown a drastic decline from $85.64 in January 2021 to this year’s price of under $49.5 per barrel.[3]

    Moscow has been forced to offer steep discounts due to restrictions on Russian sales to a select few buyers and the need to transport these goods to customers on extended voyages.[2] The allowance of Russia to keep up export volumes has aided in making sure that the global supply remains plentiful, ultimately resulting in Brent crude dropping to around $80 a barrel.[2]

    0. “Upstart Indian Shipper Helps Get Russian Oil to Market” The Wall Street Journal, 29 Jan. 2023,

    1. “Russia's Oil Cargoes Surge With Pipe Down and Fuel Ban at Hand” Bloomberg, 30 Jan. 2023,

    2. “Russia Sends More Oil by Sea, But Kremlin’s War Chest Pressured” Yahoo Entertainment, 6 Feb. 2023,

    3. “Russian Urals Traded At $49.48 in January, But The Kremlin Isn't Worried”, 1 Feb. 2023,

    4. “Discount Strategy Has Limits for Russian Products” Energy Intelligence, 2 Feb. 2023,

    5. “India is Playing an Increasingly Important Role in Global Oil Markets, Buying More and … – Latest Tweet” LatestLY, 5 Feb. 2023,

    6. “How India Is Turning Russian Oil Into The West's Fuel” NDTV, 5 Feb. 2023,

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