Half of Russia's crude is headed east to Asia, compared to 75 percent of Russia's oil exports which were being shipped to Europe earlier this year, Alexander Dyukov, chief executive of Gazprom Neft, said on Friday.
At the beginning of this year, three-quarters of Russia's crude was going to Europe. Now more than 50 percent of the crude is being shipped to the Asian market, the head of Gazprom's oil arm said at the St Petersburg International Economic Forum, as carried by Russian news agency Interfax.
"The global economy and consumers will have to pay for the political decision, but not Russia's economy or consumers. Perhaps, some kind of burden could fall on us," Dyukov was quoted as saying.
Russia is boosting exports to India and China. Russia is even estimated to have overtaken Saudi Arabia to become India's second-largest supplier of crude oil in May. The average daily rate of Russian oil exports to India stood at 819,000 barrels last month, compared with 277,000 barrels per day (bpd) in April.
Still, analysts doubt the Asian market can absorb all the 4 million bpd of oil Russia was sending to Europe before the Russian invasion of Ukraine.
Russia could see between 2 million bpd and 3 million bpd of its oil exports-or about a quarter of the country's oil production-disappear from the global market by end-2022, Fitch Ratings said earlier this month.
"We believe that redirecting of all Russian oil and products volumes may not be possible due to infrastructural limitations, buyers' self-restrictions and logistical complications, such as potential restrictions on providing insurance for cargos carrying Russian oil," Fitch added.
With the EU embargo on Russian seaborne oil coming into force within eight months, global oil supply may struggle to catch up with demand next year, as tighter sanctions will force Russia to shut in more wells and a number of producers will bump up against capacity constraints, the International Energy Agency (IEA) said this week in its first outlook on the oil market for 2023.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More