Ukraine-Russia War News: Live Updates
As the United States bans Russian energy imports and Europe wonders how far to go to do the same, Russian President Vladimir V. Putin told senior officials and industry representatives this week that Moscow should seek to redirect its energy exports to “promising markets”. in “the south and the east”.
Mr Putin has ordered plans to expand export infrastructure to Africa, Latin America and Asia-Pacific. But the only real alternative for Russia to compensate for the losses of Europe, its largest customer by far, would be Asia, given its geographical proximity, economic growth and scarcity of natural resources, according to the analysts.
However, accelerating energy deliveries to Asia would require the construction of pipelines, railroads and ports in eastern Russia, a process that would take years, if not decades. It would also require political will and commitment to increase infrastructure for recipient countries.
“When you look at the amount they send to Europe, even if Europe halves its dependency, that would be a huge amount to send elsewhere,” said Philip Andrews-Speed, senior researcher at the Institute for energy from the National University of Singapore.
Oil and liquefied natural gas, delivered by ship, can be more easily redirected, he said, but replacing gas exports will be much more difficult.
“The idea that they can send huge amounts of gas to Europe and transfer it to Asia, even in a year or two, is really a no-start,” Mr Andrews-Speed said.
Europe accounts for about half of Russia’s crude oil and condensate exports, three-quarters of its natural gas exports and a third of its coal exports, according to the US Energy Information Administration.
Early indications are that Russia has shown interest in India and China.
India said in mid-March it was in talks with Russia to increase oil imports at a reduced price, despite warnings from some US officials that scaling back efforts to isolate Russia could have consequences. consequences. India depends on imports for about 80% of its oil needs, of which 3% comes from Russia.
In the first five weeks of the war in Ukraine, Indian purchases of Russian oil jumped more than 700% from the previous five weeks, according to the Russian Tanker Tracking Group, a Ukrainian government-led initiative to monitor sales of Russian oil.
On the eve of its invasion of Ukraine, Russia signed a one-year, $20 billion deal to sell 100 million tons of coal to China. A senior Chinese diplomat said in early April that China was not a party to the conflict in Ukraine and did not believe “our normal trade with any other country should be affected”.
China already receives gas from Russia through the 1,800-mile-long “Power of Siberia” pipeline, which began flowing in 2019, and is in talks to build a second pipeline.
Europe has banned Russian coal and said on Thursday that an oil embargo was being prepared, likely to be adopted in the coming weeks. European nations have been paying Russia around €1 billion a day for the bloc’s energy imports, the EU’s foreign policy chief said last week in a speech to the European Parliament.
Russia’s need to find new destinations for its energy exports could mean the countries are able to secure a steep discount, analysts say.
“Western companies divesting from Russia mean Asian companies are likely to face fewer competitors in the Russian commodities market, giving them the upper hand in negotiating terms and prices,” the analysts wrote. from British consultancy Verisk Maplecroft in a report this week. “Major importers such as China and India will be in a more comfortable position to negotiate terms with other energy providers.”