U.S. President Donald Trump is increasing the pressure on China and India to stop purchasing oil from Russia, claiming it is helping fund the Kremlin’s war against Ukraine.
Trump is raising the issue as he seeks to press Russian President Vladimir Putin to agree to a cease-fire.
However, cheap Russian oil benefits refiners in those countries as well as meeting their energy needs, and they show no inclination to halt the practice.
China, India and Türkiye are the biggest recipients of oil that used to go to the European Union. The EU’s decision to boycott most Russian seaborne oil from January 2023 resulted in a significant shift in crude oil flows from Europe to Asia.
Since then, China has been the No. 1 overall purchaser of Russian energy since the EU boycott, with some $219.5 billion worth of Russian oil, gas and coal, followed by India with $133.4 billion and Türkiye with $90.3 billion. Before the invasion, India imported relatively little Russian oil.
Hungary imports some Russian oil through a pipeline. Hungary is an EU member, but its President, Viktor Orban, has been critical of sanctions against Russia.
One big reason: It's cheap. Since Russian oil trades at a lower price than the international benchmark Brent, refineries can increase their profit margins when they convert crude into usable products, such as diesel fuel.
The Kyiv School of Economics reports that Russia earned $12.6 billion from oil sales in June. Russia continues to earn substantial sums even as the Group of Seven (G-7) leading industrialized nations have tried to limit Russia's take by imposing an oil price cap.
The cap is to be enforced by requiring shipping and insurance companies to refuse to handle oil shipments above the cap. Russia has, to a great extent, been able to evade the cap by shipping oil on a "shadow fleet" of old vessels using insurers and trading companies located in countries that are not enforcing sanctions.
Russian oil exporters are expected to earn $153 billion this year, according to the Kyiv Institute. Fossil fuels are the single largest source of budget revenue. The imports support Russia's ruble currency and help Russia purchase goods from other countries, including weapons and parts.
