Russia claims US sanctions have failed to curb its oil output

Russia stated on Tuesday that sanctions imposed by the US and Western nations have not limited its crude oil shipments, and that it has redirected the majority of its volumes to allied countries in other regions of the world.

During an energy forum on Tuesday, Russian Energy Minister Nikolai Shulginov said, “I can say today that we have managed to completely redirect the entire volume of exports affected by the embargo. There was no decrease in sales.”

Rather than Europe, which had acquired more than half of its crude oil prior to its war in Ukraine, Russia has been rerouting its crude oil and refined products to Asia, Africa, Latin America, and the Middle East.

Deputy Prime Minister Alexander Novak also spoke at the event, praising Russia’s energy industry as “sustainable” despite Western sanctions. Energy revenue accounted for 42% of Russia’s federal budget in 2022, up from 36% in 2021, according to Novak.

Over the past year, India’s crude oil imports from Russia have risen 22-fold, although Novak did not specify the volumes sold. India was also the largest buyer of Russian seaborne Urals-grade crude exports in March, followed by China.

Novak added that Russia intends to concentrate on developing the necessary insurance tools to support its oil sales in the new market in the coming months.

These declarations come as the US leads the charge for a G-7-backed oil price cap coalition aimed at restricting Moscow’s oil revenue. Treasury Department officials have claimed that since the cap came into effect in December, it has successfully achieved its dual objectives of lowering Russia’s oil revenue while maintaining its barrels on the market.

However, obtaining a clear picture of Moscow’s shipping volumes or the price point that China and India purchasers have paid for Russian supplies is difficult.

JPMorgan Chase recently forecasted that Russia would be able to maintain its oil production at pre-Ukraine invasion levels of 10.8 million barrels per day, supported by increased demand from China and India, which are expected to grow by a combined 1 million bpd this year.