The use of the destination unknown label is a sign that the oil is being taken to larger ships at sea and unloaded, analysts and traders said. Russian crude is then mixed with the ship’s cargo, blurring where it came from. This is an old practice that has enabled exports from sanctioned countries such as Iran and Venezuela.
Much of Russia’s oil is still being marked with clear destinations on shipping documents. Barrels bound for Romania, Estonia, Greece and Bulgaria more than doubled this month compared with March averages. Volumes also rose substantially for the Netherlands, the biggest buyer in Europe, and Finland. Some buyers are rushing to get business done in anticipation of potential new restrictions, while others say they are executing deals struck before the invasion. Sanctions would force them to break those contracts.
The larger picture
The Ukraine crisis is in fact the Oil crisis – not an anomalous conflict, but the beginning of a new energy order for which Europe appears utterly unprepared. For too long Europe has enjoyed the Russian Oil and as rising oil cost bites, they seem very concerned about democracy, human right and security. Europe’s security is gravely threatened but not by Russia but by Russian oil and this is the result of their complacency, and skewed energy policy. This century will test the West in ways it hasn’t been tested in since the WW2. It can only survive with the kind of fight it seems resolutely determined to avoid if it goes back to the basics that Oil is a luxury and all nations have the right to enjoy it, not only the West.
Russia’s brutal invasion of Ukraine earlier seemed like an unexpected opportunity – a “gift of God” for environmentalists, who had struggled for years to focus the world’s attention on the kind of energy independence that renewable resources can offer. With the West trying to wean itself from Russian oil and gas, the argument for solar and wind power seemed stronger than ever. However, the latest victim of the Ukraine war is none other than the fight against the climate change. There seems very little appetite in the West to pursue the Climate Agenda seriously.
Nations are reversing plans to stop burning coal, and many are even considering opening of the closed Coal mines. Many are scrambling for more oil and are committing billions to building terminals for liquefied natural gas, known as L.N.G. Fossil fuel companies, long on the defensive, are capitalizing on energy security anxieties and lobbying hard for long-term infrastructure investments that risk derailing international climate targets agreed to only last year.
Does it make economic sense?
Given the current political and inflation situations back home, India, which imports 85 per cent of its oil needs, is looking to cut spiraling energy bills through purchases from anywhere it can get at cheaper rates. And Russia, which desperately needs money to fund its ongoing conflict with Ukraine, came as a friend in need. A $25 per barrel discount was too good an offer for India to say no to, especially at a time when domestic inflation is peaking.
According to a research Report, such a discount works well for India because every 10% rise in crude oil prices would lead to a 0.3 percentage point-widening in India’s current account deficit (CAD), and in turn, weaken the rupee further. New Delhi has consistently asked all stakeholders to resolve differences through dialogue. Many countries, including European nations, remain heavily dependent on fuel from Russia, the world’s second-largest crude oil exporter behind Saudi Arabia. In contrast, India fulfils just 1.3 per cent of all its oil needs from Russia. With economic growth projected to rebound in India to nearly 8 percent this year after the pandemic slump, India is in the market for energy wherever it can get it. With EU itself depending on energy on external sources, India must explore other energy suppliers, but Russia must remain its main energy resources.
