The problems of Russian energy resources reorientation from Europe to Asia

Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the Moskovsky Komsomolets newspaper about the problems of reorienting Russian energy resources from Europe to Asia.

According to Gromov, one can say that Europe has lost Russia for at least many years, since Russia's work to redirect energy flows to the East has been on the agenda for a long time.

The expert noted that the situation with the reorientation of supplies of various types of energy resources from West to East develops in different ways. He believes that although with the introduction of an embargo on the supply of oil and petroleum products to Europe, Russia is losing a large sales market, a complete replacement of the European market is possible.

From the point of view of oil products, the situation is more complicated, since Europe accounted for almost 2/3 of deliveries, and there is no other such niche in foreign markets.

“But Europe will not be able to find the volume of oil products it needs in other markets, so I do not exclude that next year there will be “gray schemes” for indirect supplies of oil products from Russia to Europe, for example, through the UAE or Saudi Arabia,” he said.

As for gas, as the expert noted, Europe did not impose sanctions on gas supplies from Russia. But after sabotage on the NS gas pipelines, a decrease in exports through Ukraine and a ban on supplies through the Yamal-Europe gas pipeline, pipeline gas supplies may be reduced from 145 billion cubic meters in 2021 to 30-35 billion. According to Gromov, in 2022, deliveries through the Power of Siberia will amount to about 20 billion cubic meters, in 2023 - up to 30 billion cubic meters. Thus, about 20% of the lost European market will be covered, he said.

“Asia can significantly help in diversifying Russian energy exports, but it will not be possible to completely replace the European market with the Asian one. In the future, everything will depend on the speed of development of the relevant infrastructure,” he said.

Gromov also noted that the main obstacle to the reorientation of energy exports to Asia will be the lower solvency of Asian buyers compared to Europe.