Are Russian Barrels Getting Out Of Favor?

11th March 2024:Demand for Russian crude is cooling as sanctions tighten When Russia invaded Ukraine a little more than two years ago, the reaction from many Western companies and governments was swift. They slapped a multitude of sanctions on the Kremlin regime and vowed to stop importing Russian crude oil and refined products. The G7 sanctions initiated a massive reshuffling of crude oil trade flows as Russia was forced to look for alternative customers for their oil. Initially, market observers expected that it would be challenging for Russia to find alternative clients for their oil given their massive dependence on Europe for both oil and refined products. This proved not to be the case. Russia offered significant discounts and price sensitive buyers such as India, China and Turkey were happy to take advantage of the situation and ramped up purchases. India in particular, went from a minor buyer of Russian crude prior to the invasion to the largest customer of the Kremlin in 2022 and 2023. Turkey also boosted its imports, mainly of Urals while China remained a large customer.