Photo: Novatek.

By Martin Chomsky

If the European Union no longer wants Russian oil, Southeast Asia will get it. Kremlin threats will easily turn against Russian companies and state finances.

These were the views were expressed by Kremlin spokesman Peskov on Monday. He said that if EU countries refuse to pay for Russian gas in roubles, Russia will certainly not provide the fuel for free. Peskov also said that “dropping order volume for oil” from European buyers would be offset by sales to Southeast Asia. He stressed that Europe is not the only market for Russian oil.

This is contradicted by statistical data. According to the BP energy report, in 2020 Russia exported 138.2 million tonnes of crude oil to the European market out of 260 million tonnes of total crude exports. China was the second largest customer, with 84 million tonnes, while the rest purchased small amounts of Russian crude, including South East Asia with just 10 million tonnes.

It will be impossible for Russian oil companies to replace a market as large as the European one, unless they start selling at dumping prices. Here, however, international sanctions could effectively put the brakes on anyone wanting to buy blood-stained Russian oil.

In the case of petroleum products, Russia’s dependence on the European market is even greater, with 58 million tonnes out of a total of 107 million going into Europe every year.

Gazprom’s reliance on European customers is even greater. Europe imports 447.1 bcm of gas (2020), of which Gazprom supplies 167.7 bcm. What will the concern do if it is left with this amount of raw material? It can push a maximum of 35 bcm a year to China via pipeline. There are no pipeline connections with India or other Asian countries, where it would still have to compete fiercely against long-established exporters from Australia, Indonesia and Malaysia.

Russia as a country is deeply dependent on the export of raw materials, mainly oil and gas, whose sale provides half of the store of foreign currency filling the state coffers. Putin – despite numerous announcements – has not managed to turn around this unfavourable situation in his nearly 25 years in power.