Russia raises its oil revenues by 50% so far this year, despite sanctions

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Russia’s income derived from oil exports has increased by 50% in the first four months of 2022 compared to the same period of the previous year, according to estimates by the International Energy Agency (IEA), contained in its latest bulletin monthly.

According to the agency attached to the Organization for Economic Cooperation and Development (OECD), monthly sales of oil and derivative products would have reported to Russia about 20,000 million dollars (18,978 million euros) on average each month.

“Despite the sanctions currently in place, and talk of more to come,” Russia’s total oil exports rose by 620,000 barrels a day in April to 8.1 mb/d, in line with the sales from January to February.

However, the IEA considers that “the reorientation of trade flows is already taking place”, with a notable shift in volumes from Europe and the United States to India.

In the fourth month of 2022, shipments from Russia to the EU decreased by 535,000 barrels per day and to the United States, by 545,000 units per day, in addition to 160,000 barrels per day to the United Kingdom, which were mainly offset by increases to India ( +730,000) and Turkey (+180,000).

Thus, in April the EU remained the largest market for Russian oil exports, with 3.4 mb/d, or 43%, compared to 50% at the beginning of the year, while the United States and the United Kingdom , which together accounted for 9% of Russian exports at the beginning of 2022, reduced their representation to zero in April.

Despite the increase in oil revenues in the first four months of 2022, the IEA has stressed that Russia’s isolation following its invasion of Ukraine “is deepening” as the EU and the G7 contemplate tougher sanctions including the removal total oil imports of the country.

“If accepted, the new embargoes would accelerate the redirection of trade flows that is already underway and will force Russian oil companies to close more wells,” he defended.

WORLD DEMAND FOR OIL.

Globally, the IEA has kept its forecast for oil demand growth stable in 2022 at 1.8 million barrels per day, up to 99.4 mb/d.

However, the agency estimates that the increase in world oil consumption will moderate between April and June to 1.9 mb/d, after having increased by 4.4 mb/d during the first quarter of 2022.

Rising pump prices and slowing economic growth are expected to significantly slow the recovery in demand for the rest of the year and into 2023.

In addition, he has pointed out that the prolonged lockdowns in China to contain the spread of Covid-19 are causing a significant slowdown in the second largest oil consumer in the world.

In this way, the agency is confident that, as restrictions in China are relaxed and consumption recovers due to the increase in driving in summer and the reactivation of aviation, world oil demand will increase by 3.6 mb /d from the minimum of April to August.

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