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Russia to flood Asia with fuels as Europe ramps up sanctions: Report

Moscow plans to raise taxes on energy sector to the tune of $50 bn in 2023-25

Topics
Russia Oil production | Asia | oil trade

Agencies 



crude oil
India and China took a combined 2.7 million barrels a day of Russian crude and products last month (Photo: Bloomberg)
Russia is likely to ship more fuel to Asian nations in the coming months as tightens sanctions to step up its response to the invasion of Ukraine. The country is also considering to raise taxes on the oil and gas sector to the tune of 3 trillion roubles ($50 billion) in 2023-2025 in order to plug the budget gap, The Kommersant Daily said on Tuesday, citing sources familiar with the discussions. The finance ministry declined to comment. The two regions ( and the Middle East) have already been taking a greater share of Russian exports since the war broke out, according to data from S&P Global Commodities at Sea, highlighting the as-yet-unfinished reconfiguration of global energy flows. The European Union is set to bar most imports of Russian crude from December 5, followed by a prohibition on oil products that’ll kick in from February, ramping up the pressure on Moscow to redirect more of its energy output. India and China took a combined 2.7 million barrels a day of Russian crude and products last month, according to Morgan Stanley. That’s 54 per cent higher than a year ago. Smaller nations, dubbed the rest of the world, boosted imports to 926,000 barrels a day from 561,000, the bank said in a recent note. While buyers in some nations such as Myanmar or Sri Lanka have acknowledged taking Russian cargoes as the war drags on, others have been more circumspect. As the trade continues to evolve, Russian sellers have been employing a variety of tactics to develop existing as well as find new outlets, including re-exports and ship-to-ship transfers.

An uptick in flows may spur competition, hurting prices and undermining refining margins. The finance ministry expects a budget deficit of 1.2 per cent of GDP this year and 1.1 per cent of GDP in 2023 amid spending for what Moscow calls a ‘special military operation’ in Ukraine and sweeping Western sanctions. chart The ministry has also proposed hiking the oil export duty and increasing state revenue from the oil products trade. The newspaper said the finance ministry seeks to raise some 1.4 trillion roubles in 2023 alone by hiking export duties and mineral extraction tax on commodities. The measures, which also include a possible rise in the oil exports duty in 2023 by 50 per cent , will be considered at a government meeting later.

Biden to release 10 mn oil barrels The Department of Energy will offer additional US reserve crude for sale ahead of plans by the European Union to ban most Russian oil in December. The agency will offer 10 million barrels of low-sulfur crude for supply in November from storage caverns in Texas and Louisiana, according to a press statement. Bids for the supply that will originate from Big Hill, Texas, and West Hackberry, Louisiana, are due by September 27. Awards will be made no later than October 7. The government’s offer is coming at a time when global benchmark oil prices have retreated to levels seen before Russia’s invasion of Ukraine began as investors heed warnings of a global recession.

- Bloomberg
China’s Russian fuel bill at $8.3 bn China’s spending on Russian energy products hit a record $8.3 billion last month, as the world’s top importer continues to expand its reliance on Moscow for overseas supplies of crude, oil products, gas and coal. The haul for August was 68 per cent higher than a year ago and included a record amount of coal, according to Chinese customs figures. It brings the total over the six months since Russia’s invasion of Ukraine to nearly $44 billion, an increase of 74 per cent. Although import values have been inflated by the global spike in energy prices caused by the war, China is still taking more volumes at discounted rates from its strategic ally. The increased spending also comes despite weaker energy imports this year as demand is crimped by a slowing economy and theCovid Zero policy. -Bloomberg
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First Published: Tue, September 20 2022. 22:25 IST

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