Russia has found a replacement for Europe for coal supplies

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented on the export of Russian coal to Vzglyad.

On average, Russia supplied the EU with 4 million tons of coal per month. Potentially, India could easily absorb this volume, especially if Russian coal is discounted. The money issue for India, as for many developing countries, is now extremely important.

But besides supply and demand, there are a number of other factors. First, there may be logistical problems.

“Now a large volume of coal supplies goes through the northwestern ports. But for the shipment of coal to India, it is better to choose the ports of the south. But there may be difficulties with the supply of coal by rail. The railway in the southern region has a large passenger load due to flight restrictions in the region, which also affects freight traffic,” Kondratiev explains.

Secondly, problems may arise with dry cargo ships, which are necessary for transshipment of coal. Russian exporters have mostly chartered ships on the open market, and some shipping companies may refuse to work with them. This will increase freight rates for Russian coal miners. “However, this is not critical. Because coal prices are at historical highs. Russian shippers will be able to withstand the rise in freight costs. And in the absence of a formal ban on working with coal cargo from Russia, there will still be those who want to transport Russian coal at such high freight rates. Developing countries also have bulk carriers,” Sergey Kondratiev notes.

Thirdly, in order for India to receive Russian coal at a favorable price, Russian companies need to negotiate directly with Indian buyers on supplies.