Russia Confounds the West by Recapturing Its Oil Riches

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Top Highlights

• Demand from some of the world’s largest economies

• Sales are booming in Russia’s export market, the world’s largest in crude and refined fuels.

• Oil revenue more than makes up the difference. “

• Even with the dip in oil exports, Russia has earned $20 billion in average monthly sales this year compared with a $14.6 billion monthly average in 2021, when economies were recovering from the pandemic crash.

• which is juggling two conflicting goals: Tamping down inflation with increased global oil supplies, and keeping economic pressure on Mr. Putin.

• Oil prices, which spiked past $130 a barrel in the first weeks of the war, have settled around $100 in recent weeks

• or exported from Fujairah, a U.A.E. port and hot spot for blending Russian and Iranian oils to conceal their provenance

• Iranian, Venezuelan and now Russian fuel oil is stored in the trading hub of Fujairah and intentionally disguised, according to oil traders.

• The rewiring of the oil market stabilized the Russian energy industry after the fear of sanctions struck early in the war.

• India is now Russia’s best customer.

• Some refine Russian oil and make profits exporting it to the West as gasoline and diesel.

• In the long run, Russia will struggle to remain a top-tier oil supplier, said analysts and current and former energy executives. There are physical limits on how much Russian crude that refiners in India and China can take. And, as Russian machinery ages and access to Western software is lost, sanctions that ban technology imports cloud future energy prospects.

• On Dec. 5, the EU is due to phase in an embargo on Russian oil and a potentially punishing ban on insuring and financing Russian oil cargoes. If enforced, which some traders and analysts doubt, the measures would significantly escalate efforts to handicap Russia’s economy.

• Russia might struggle to find new buyers for about 1.25 million barrels of the crude and fuel exports that currently head to Europe each day.

• The U.S. wants the EU to bar insuring cargoes only if they don’t comply with a per-barrel price cap. The aim is to shrink Mr. Putin’s war chest while keeping prices from new highs.

• Proceeding with the EU’s proposed restrictions would reveal the continent’s willingness to absorb economic pain on behalf of Ukraine.