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Russia earns €93 bn in fossil fuel exports in 100 days of war

In the first hundred days of the Ukraine war, China overtook Germany and Italy as the largest importers of Russian fuels, a new report has found.

Gas pipeline (Photo credit: Adobe Stock/alexkich)

Russia exported 93 billion euros’ worth of fossil fuels in the first hundred days since the invasion of Ukraine, with 32% of the export revenues coming from fossil gas, according to a new study by the Centre for Research on Energy and Clean Air (CREA), a non-profit think tank, published on Monday. China has overtaken Germany as the largest importer of Russian fossil fuels, at 12.6 billion euros, but Germany is still the largest importer of Russian gas, the study found.

The CREA study found that EU countries imported 61% of Russia’s fossil fuel exports in the first 100 days of the war, at an estimated value of around 57 billion euros. This is a reduction compared with CREA’s analysis from late April when it found that EU countries had imported 71% of Russia’s fossil fuel exports. The new report also found that China had overtaken Germany and Italy as the largest importers of Russian fuels.

“China’s imports have been essentially constant while Germany has managed a modest reduction in oil imports from Russia,” said the report.

The largest importers were China (12.6 bn euros), Germany (12.1 bn euros), Italy (7.8 bn euros), Netherlands (7.8 bn euros), Turkey (6.7 bn euros), Poland (4.4 bn euros), France (4.3 bn euros) and India (3.4 bn euros).

Russia’s export revenues for piped gas were estimated at 24 billion euros compared with 5.1 billion euros for LNG. This compares with revenues of 46 billion euros for crude oil, 13 billion euros for oil products and 4.8 billion euros for coal. Fluxys terminals in France and Belgium were the main destinations for Russian LNG deliveries. The Zeebrugge terminal imported an estimated 60 LNG shipments in the one-hundred day period at an estimated value of 3.7 billion euros. Montoir-de-Bretagne, which also is owned by Elengy, imported 12 cargoes at an estimated value of 1.29 billion euros.

The CREA report found that import volumes of Russian fossil fuels fell by around 15% in May this year compared with the period before the invasion of Ukraine. The reduction in demand and the discounted price for Russian oil cost Russia around 200 million euros per day in May.

At the same time, higher prices for oil, gas and coal since the invasion have boosted the Kremlin’s export revenues.

“Russia’s average export prices were an average 60% higher than last year, even if they were discounted from international prices,” the study said.

On a positive note, CREA said higher prices for fuels could speed up the energy transition.

“The record-high fossil fuel prices and the drive to reduce reliance on Russia have prompted increased ambition for clean energy and energy efficiency across Europe, which will effectively lessen the impact of banning imports from Russia,” the report said.

Russian import increases

But the report also found that India, France, China, the United Arab Emirates and Saudi Arabia increased fuel imports from Russia in the period. India became a significant importer of Russian crude oil, buying 18% of the country’s exports compared with just 1% before the invasion. Moreover, a “significant share” of the crude imported by India is re-exported as refined oil products, including to the US and Europe, which is “an important loophole to close,” CREA said.  It said more than half of the deliveries from Reliance’s 1.24 million barrels/day Jamnagar refinery are exported outside of India.

“Approximately 20% of exported cargoes left for the Suez canal, indicating that they were heading to Europe or the U.S. We identified shipments to the United States, France, Italy and the UK,” said CREA.

Moreover, European buyers, in France, Belgium and the Netherlands, bought most of Russia’s LNG and crude oil spot cargoes at a discount.

“These purchases take place outside of pre-existing contracts, therefore always representing an active purchase decision,” said the report.

The CREA report added that, due to long shipping distances from India, far reaching sanctions against tankers transporting Russian crude would significantly limit the scope for this kind of rerouting of Russia’s exports. The EU has introduced a number of sanctions on Russian seaborn oil imports that will begin to take effect in six months’ time for spot cargoes and existing contracts. EU operators will also be prohibited from insuring and financing cargoes of oil to third-party countries.

In its previous report, CREA identified 23 large companies that bought Russian fossil fuels in the first two months of the war. In total, 13 of these companies have continued purchases in May including oil companies Exxon, Shell, Total and Repsol as well as power companies Taipower and Japan’s Chubu Electric Power and TEPCO.

However, some companies, including RWE, Kyushu Electric Power, Tohoku Electric Power, KEPCO, Hyundai Steel, Sumitomo, Mitsubishi and Enagas, did not import Russian cargoes in May.

“It’s not clear if they have terminated purchases or simply did not have deliveries in May,” said the report.