Russia's seaborne crude exports are running at record highs to India, even as the US let a temporary sanctions waiver on Moscow's oil lapse on June 17 as Washington shifted focus towards finalising the Iran deal.
US President Donald Trump, however, has signalled Washington could escalate pressure on Russia when Iranian crude resumed flowing through the Strait of Hormuz. “We'll be able to do that because the oil is now flowing,” Mr Trump said at the G7 summit in France, where leaders pledged to tighten sanctions on Russia's war economy.
After the Iran war brought traffic through the Strait of Hormuz to a standstill, the US Treasury Department issued three consecutive 30-day licenses easing sanctions on Russian seaborne oil to cool high oil prices.
The department previously allowed the General License 134C, which allowed the sale of Russian cargo, to expire twice before renewing it each time. Treasury Secretary Scott Bessent said it was needed to help support energy-vulnerable nations.
Russia exported an average of six million barrels a day of crude in May, up from 4.9 million in February, according to S&P Global Commodities at Sea. Russia earned around €726 million ($832 million) in May from fossil fuel exports, a two per cent increase on the month in May, according to the Helsinki think tank Centre for Research on Energy and Clean Air (Crea), which tracks Russian flows.
The lapse of the Russian waiver has led to pushback in the US, with a group of senators, including Elizabeth Warren and Jeanne Shaheen, signing a petition on June 16 opposing the extension of sanctions relief for Russia after General License 134C expired on Wednesday.
“Extending this license yet again would give Vladimir Putin another opportunity to reap windfall financial gains while he continues his brutal war against Ukraine,” the senators said.
Sanctions over Russia are being tightened elsewhere in Europe. The UK, on May 20, banned imports of refined products made from Russian crude in third nations, mirroring an EU measure in force since January. However, they have both carved out temporary exemptions for diesel and jet fuel to soften the energy supply shock from the Iran war.
Russia's three biggest buyers, however, are engaging with record supply volumes from Moscow differently.
India
India's Russian crude purchases are on course to hit an all-time high in mid-June, averaging 2.35 million bpd, according to Kpler. They surpassed the previous high of 2.16 million bpd reached in May 2023, as a direct consequence of waivers that allowed India to purchase discounted Urals. Russia has been India's top supplier for the past two months of the Iran war.
India was the second-largest buyer of Russian fossil fuels in May, importing €5.8 billion worth, of which crude made up €4.8 billion, according to the Crea. Total Indian crude imports rose 8 per cent on the month, lifted partly by a 21 per cent jump in Russian volumes. State refiners that had halted Russian purchases late last year resumed buying in March, and India's east-coast facing Paradip refinery took its largest Russian cargo in two years.
India does not maintain an autonomous sanctions list and does not recognise unilateral measures imposed outside the UN. India’s External Affairs Minister, S Jaishankar, accused western governments of double standards last week. He said Washington had pressed India to buy Russian crude in 2022 to steady the market and then penalised it for doing so. “Let's not pretend there's some great principle involved here,” he said in Finland.
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Russian President Vladimir Putin, right, is welcomed by Chinese President Xi Jinping at a ceremony at the Great Hall of the People in Beijing. EPA -
President Putin with President Xi at the start of the Russian leader's state visit to China. EPA -
Mr Putin, left, and Mr Xi, fourth from right, meeting in Beijing. EPA -
Mr Putin and Mr Xi shake hands during a signing ceremony. AFP -
Chinese People's Liberation Army guards march during the welcome ceremony for President Putin. EPA -
Mr Putin and Mr Xi at the Great Hall of the People. Mr Putin's trip to China follows visits by US President Donald Trump and Iranian Foreign Minister Abbas Araghchi. Reuters -
The leaders inspect an honour guard. EPA -
A 21-gun salute rang out as a military band played during the welcome ceremony. AFP -
PLA honour guards hold Chinese and Russian flags. Reuters -
Mr Putin with Chinese engineer Peng Pai in Beijing, 26 years after they met during the Russian leader's first visit to China. AFP -
Mr Putin told Mr Xi that Russian-Chinese relations were a model partnership. EPA -
Dozens of children holding Russian and Chinese flags greeted the leaders. AFP
China
In May, Beijing imposed a blocking order barring enforcement of US sanctions on five Chinese “teapot” refineries that process discounted Iranian and Russian crude, its most aggressive pushback yet against US curbs.
Vice Premier He Lifeng told a forum in Shanghai on June 17 that China would write countermeasures into upcoming financial legislation to shield its banks and companies from sanctions. “We don't stir up trouble… but we are absolutely not afraid of it,” he said. The remarks followed Washington's move earlier in June to blacklist Alibaba, BYD, Baidu and dozens of other firms over alleged military ties, alongside fresh designations of Chinese refineries buying Iranian crude.
Chinese oil import data complicates the picture. China's total seaborne crude imports fell 17 per cent month-on-month in May, with Russian volumes down 23 per cent, according to the Crea, a drop attributed to refinery economics rather than politics. China also draws Russian crude through the Skovorodino-Mohe section of the Eastern Siberia–Pacific Ocean pipeline, which bypasses freight and Western curbs.
Russian oil exports to China rose 35 per cent year-on-year in the first quarter to 31 million tonnes, according to the Kremlin. Russian crude unloaded at the Dongjiakou terminal jumped 144 per cent to a two-year high even as overall imports slid. It coincided with a 66 per cent drop in imports from Iran's Kharg Island as refiners swapped Iranian barrels for Russian ones.
Turkey
Turkey, the third-largest buyer behind India and China, is on a different trajectory. Its imports of Russian Urals were expected to average about 161,000 bpd in May, down from 302,000 between January and April, Reuters reported, citing Kpler and LSEG data. The pullback reflects a narrowing discount. Urals averaged $82 a barrel in May.
Turkish refiners accustomed to steep markdowns shied away from higher prices and turned to grades such as Kazakhstan's CPC Blend and Iraqi Basrah. Turkey still bought €2.8 billion of Russian hydrocarbons in May, though refined products rather than crude made up the bulk, according to Crea.
