These 6 European countries paid Russia $40 billion for fuel in the three months of the war, despite looming bans and sanctions on imports

  • Germany, Italy and France are among the European countries that have snapped up cheap Russian fuel.
  • Their purchases accounted for nearly half of the $97 billion in revenue Russia from fuel exports.

Six European buyers accounted for nearly half of Russia’s fossil fuel export revenue in the first 100 days of the war in Ukraineeven as the European Union was drawing up a plan to ban imports from the country, according to a recent analysis by a Finnish think tank.

France, Germany, the Netherlands, Italy, Poland and Belgium were the main European buyers of Russian fossil fuel exports, including coal, crude oil, natural gas and oil products on the spot market between March and May, depending on according to the Center for Research on Energy and Clean Air (CREA)

The spot market is where traders buy and sell physical cargoes of oil, for example, for immediate delivery, as opposed to the futures market, where they lock in a price for delivery at some point later.

“These purchases take place outside of pre-existing contracts, therefore still representing an active purchase decision,” CREA writes in its analysis.

European commodity traders have actively avoided Russian shipments of crude oil and refined products, while most natural gas imports arrive by pipeline and are harder to avoid.

Altogether, these countries shelled out a combined total of $40 billion of the roughly $97 billion that Russia pocketed for its fossil fuel exports at that time, CREA said.

Record discounts

Russian oil is cheaper than other grades right now as Western sanctions and traders avoiding these exports have reduced the value of its flagship Urals crude.

A barrel of Urals crude is currently trading at a record $30 discount to the global market Crude Brent benchmark, which stood at around $120 a barrel on Friday, near its highest in a decade.

To that end, Russia’s cheap oil and gas sales are expected to reach $285 billion in 2022, a 20% increase from its oil and gas profits in 2021, according to Bloomberg Economy. This is due to Chinese and Indian purchases of Russian oil, which now account for half of Russia’s maritime oil exports.

And while demand from China has remained constant, India has increased its purchases, to the tune of approximately 800,000 barrels per daycompared to almost nothing as recently as January.

In response, Russian oil production, which many expected to decline in line with demand, has jumped 5% so far in June in response. Average daily oil production, including condensate, reached 1.46 million tonnes in the first 13 days of June, up 68,000 from May, according to Reuters, which cited data from Interfax.

Meanwhile, European countries continued to buy Russian fuel even after EU leaders struck a deal to cut oil imports from Russia by around 90% by 2022. But it has not yet planned to stop natural gas imports.

The EU has typically relied on Russia for around a third of its oil needs and up to 40% of its natural gas.

The CREA report showed that Germany was the second largest importer of Russian fuel after China, buying $12.6 billion, while other top EU importers were the Netherlands, Italy, France, Belgium and Poland. These six people paid a total of $40 billion for a combination of coal, natural gas, crude oil and refined products from February 24, when Russia invaded Ukraine, until early June.

In this context, he underlines the EU’s continued dependence on Russian fuel despite efforts to reduce its independence from its energy resources. This was only reinforced by Russian President Vladimir Putin, who said the West would not be able to cut off Russian energy resources over the next few years.