RUSSIAN OIL AND GAS EXPORTS: ONE YEAR OF WAR REVERSES DECADES OF ENERGY DIPLOMACY

The report analyzes how the Russian War in Ukraine and subsequent Western sanctions have disrupted decades of energy diplomacy. While Russian crude oil exports proved resilient by redirecting volumes to India and China, the gas sector faced a severe crisis due to its reliance on European pipelines. The document details the use of 'shadow fleets' and blending to circumvent oil price caps and the limited feasibility of redirecting pipeline gas. It concludes that Russia is becoming increasingly dependent on China and that the focus on survival and new fossil fuel markets has marginalized its domestic low-carbon agenda.

• Western sanctions, including EU, G7, and Australian bans on seaborne crude oil (December 2022) and oil products (February 2023), significantly targeted the Russian oil sector, particularly the EU market which accounted for 47% of crude and 52% of oil product exports in 2021.
• Russia mitigated crude oil export sanctions through a massive increase in sales to India, which saw imports rise seventeen-fold in 2022, though total crude exports still dropped significantly in December 2022 when the EU embargo began.
• The Russian gas sector experienced a major crisis in 2022, with production falling by 11.8% and pipeline supplies to the EU and UK decreasing by 56% (approximately 81.7 bcm), creating a 'war gap' that is difficult to fill due to the inelasticity of pipeline infrastructure.
• To circumvent the USD 60 per barrel price cap and shipping restrictions, Russia established a 'shadow fleet' of 200-300 tankers owned by offshore companies and employed techniques such as blending Russian oil with other crudes in Singapore.
• Redirecting pipeline gas to China via the 'Power of Siberia 2' is presented as a replacement for Nord Stream 2, but the project is unlikely to be operational before 2030 and depends on China obtaining highly beneficial terms.
• Russia is attempting to absorb surplus gas domestically through an expanded social gasification programme aiming for 82.9% regional gasification by 2030, though critics argue this is costly and slow.
• The Russian federal budget is vulnerable to oil price drops; the Ministry of Finance planned not to replenish the National Welfare Fund in 2023 if the Urals price fell below $70 per barrel.
• The war and the urgent need to find new fossil fuel markets have eroded the political will and resources for Russia's low-carbon agenda, as arguments for transition based on European market access are no longer relevant.

APA

Moe, A., Tsvetava, K., & Korppoo, A. (2023). RUSSIAN OIL AND GAS EXPORTS: ONE YEAR OF WAR REVERSES DECADES OF ENERGY DIPLOMACY. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2023/04/Russian-Oil-and-Gas-One-Year-of-War-Reverses-Decades-of-Energy-Diplomacy_v2.pdf

Chicago

Moe, Arild, Klava Tsvetava, and Anna Korppoo. RUSSIAN OIL AND GAS EXPORTS: ONE YEAR OF WAR REVERSES DECADES OF ENERGY DIPLOMACY. Climate Strategies, 2023. https://climatestrategies.org/wp-content/uploads/2023/04/Russian-Oil-and-Gas-One-Year-of-War-Reverses-Decades-of-Energy-Diplomacy_v2.pdf.

Wikipedia

{{cite report |last1=Moe |first1=Arild |last2=Tsvetava |first2=Klava |last3=Korppoo |first3=Anna |title=RUSSIAN OIL AND GAS EXPORTS: ONE YEAR OF WAR REVERSES DECADES OF ENERGY DIPLOMACY |publisher=Climate Strategies |date=2023 |url=https://climatestrategies.org/wp-content/uploads/2023/04/Russian-Oil-and-Gas-One-Year-of-War-Reverses-Decades-of-Energy-Diplomacy_v2.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{moe2023russian, author = {Moe, Arild and Tsvetava, Klava and Korppoo, Anna}, title = {{RUSSIAN OIL AND GAS EXPORTS: ONE YEAR OF WAR REVERSES DECADES OF ENERGY DIPLOMACY}}, institution = {Climate Strategies}, year = {2023}, url = {https://climatestrategies.org/wp-content/uploads/2023/04/Russian-Oil-and-Gas-One-Year-of-War-Reverses-Decades-of-Energy-Diplomacy_v2.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }