Russia Diversifies Oil Markets in 2024 Amid Escalating Sanctions Pressure

Russia is looking for new clients for its oil as Western sanctions tighten. According to Bloomberg, a ship carrying Russian Urals oil has reportedly landed off the coast of Venezuela.

Russia Diversifies Oil Markets in 2024 Amid Escalating Sanctions Pressure

Presently, the oil refinery connected to Amuay Bay is in close proximity to the ship Ligera. Before sailing to Venezuela last month, the tanker carried at least 1.7 million barrels of oil via ship-to-ship transfer in the vicinity of southern Greece.

The tanker’s arrival is the country’s first confirmed oil transfer to the US in the previous five years. Venezuela used to import oil to help with exports and to balance its energy mix.

The delivery also occurs in the midst of Houthi rebel attacks on Red Sea shipping vessels. In an effort to protect their personnel and cargo, several ships are staying out of the Red Sea.

The reason behind Moscow’s shipment of Urals crude to Venezuela is unknown, but according to Bloomberg, Venezuela has previously acquired similar crudes to dilute its heavy oil for export.

Urals were previously shipped to nations in the Caribbean, mainly Cuba, but the amount of these shipments is declining. Only two tankers visited Cuba last year, compared to six in 2022, according to ship monitoring data.

Sanctions Targeting Russia’s Oil Sector

Last year, the G7 nations, the EU, and allies imposed a $60 per barrel price restriction on Russian oil.

On February 5, 2023, similar restrictions on the import of Russian oil products came into effect.

Due to Western sanctions, China ended up receiving half of Moscow’s oil and oil product exports in 2023, with India gaining a larger part during the next two years, reaching 40%. Europe’s portion of Russian oil exports fell to about 4-5%, a tenfold decline.

CNN also stated that with the implementation of the price cap, the US emerged as the biggest purchaser of Indian oil products derived from Moscow. The purchases that they made between December 2022 and the end of 2023 cost them $1.3 billion.

Recently, On February 23, 2024, US imposed over 500 additional sanctions on Russia, targeting country’s oil industry, financial sector, defense sector and many more. This will further push Moscow to look for new friends to conduct business while also managing these sanctions.

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