Durrant Pate/Contributor

Despite “crippling” sanctions, Russia is now exporting more oil than before its invasion of Ukraine broke out, and soaring prices suggest revenues of US$20 billion per month from foreign sales.

Insider.com reports that India particularly has been snapping up Russia’s crude oil. In fact, despite Russia’s brutal invasion of Ukraine, the world has not been able to reduce its desperate thirst for oil.

However, with the European Union’s (EU) agreement to ban most Russian oil imports, analysts predict Russia’s production will tumble by around 1 to 2 million barrels per day, or by 10 per cent of current levels. Yet the oil market is heading for an “insanely difficult” summer, analysts say.

Soaring global oil prices

Oil prices have surged over 50 per cent this year to around US$120 a barrel, which has sent US gas prices to record highs of US$5 a gallon. The drop in Russian production will make itself felt, but demand will stay high as post-pandemic travel continues to rebound.

While other buyers have shunned Russian crude, India has compensated. Attracted by steep discounts on Russia’s Urals type of oil, India’s purchases have shot up from near-zero to more than 800,000 barrels per day. 

Russia exported 7.8 million barrels a day of oil on average over the last three months, according to International Energy Agency estimates. That’s up from 7.5 million barrels daily in 2021. However, sales to Europe are about to plunge. After much wrangling, the 27-member EU agreed in May to slash Russian oil imports by up to 90 per cent by year’s end.