Supplies are burdened by sanctions

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to Kommersant FM on whether India and China will replace Russian oil imports with supplies from the Middle East.

India may switch to the Middle East market at least before the end of the year, Alexey Belogoryev believes:

"We are talking about a temporary short-term replacement while new supply chains are being sorted out, excluding LUKOIL and Rosneft, and this may take two to three months. In December and February, there will be a drawdown in terms of exports from Russia. Supplies from the Middle East should really increase during this period. These are, in general, three countries: Iraq, the United Arab Emirates and Saudi Arabia. Only the former competes with Russian oil in terms of price.

Most likely, the main supplies will come from Iraq, but maybe something from Saudi Arabia. In any case, the cost will be higher, given the problems with Russian raw materials. Most likely, Middle Eastern suppliers will raise prices, so losses can be estimated at about $2-3 per barrel for sure.

The situation will be the same in China, most likely, contracts will also need to be reviewed and supply chains changed there. It is not yet very clear what will happen to the agreement between CNPC and Rosneft. Sea shipments will suffer the same fate as Indian ones, meaning they will recover, but closer to spring. No one can say for sure what the drawdown will be, but it will definitely happen. It is not yet possible to reorient the supply. That is, if Delhi really reduces imports, then China is the only country that will be able to accept it to some extent. Delhi's position will become a litmus test that will be taken into account by all other countries. In 3.5 years, Russian suppliers have not found any new markets except India, China and Turkey. There are individual shipments to Israel and elsewhere, but they are insignificant in total exports."