Saudi Arabia is pushing Russia out of the Asian oil market
Asian countries are increasing their oil purchases from Saudi Arabia while reducing imports from Russia, Reuters reports.
Main points of the article:
▫️ Russian oil has largely been limited to two major buyers in Asia—China and India—since sanctions were imposed following Russia’s invasion of Ukraine in 2022.
▫️ Asian imports from Saudi Arabia in November rose to 5.83 million barrels per day (up from 5.28 million in October), while supplies from Russia dropped to 3.51 million barrels per day (down from 3.96 million), marking the lowest level since January.
▫️ China reduced its purchases of Russian oil from 2.19 million to 2.04 million barrels per day, while India reduced its imports from 1.75 million to 1.47 million barrels per day.
▫️ Also, China increased its imports of Saudi oil from 1.62 million to 1.68 million barrels per day, and India boosted its imports from 610,000 to 770,000 barrels per day.
▫️ Russian oil incurs higher transportation costs due to the longer sea route from Russian ports in the Baltic to destinations in Asia.
▫️ Costs are expected to rise further with the introduction of new sanctions targeting the “shadow fleet” of Russian tankers: last week, the UK blacklisted 30 vessels, bringing the total to 73.
A decreasing demand for Russian oil will likely hinder Russia’s ability to finance its war against Ukraine, as oil remains the country’s primary source of revenue.
