NIAS Area Studies
PAKISTAN READER
Photo : Mary Lou McDonald/Twitter
IN FOCUS
By Ashwin Dhanabalan
Russia shifting its oil exports from Europe to Asia, increasing its revenue
The sanctions imposed on Russia have led to a steep rise in the prices of oil and gas exports. This has impacted the Russian economy positively as its oil export revenue has increased by 50 per cent since the beginning of 2022. The International Energy Agency (IAE) stated that the Kremlin generated close to USD 20 billion per month in oil export sales. Russia’s economy is primarily dependent on energy exports and thus has also increased the value of Russia’s ruble as the top-performing currency against the dollar. However, with Europe planning to end fossil fuel dependency on Russia and the West watching over the countries buying oil, the question arises, where and how is Russia exporting its oil?
Where is Russia exporting its oil in Asia?
First, China. On 20 May, according to a report by Reuters, China has been quietly purchasing Russia’s oil at bargain prices. This comes as Russia was selling barrels for USD 29, less than what it was compared to the pre-invasion prices. Moreover, China continues importing oil via its pipelines from Russia, bringing the total May imports to nearly 15 per cent of its domestic demand.
Second, India. New Delhi’s imports of Russian oil rose by 23.7 per cent, as Moscow became India’s fourth-largest oil supplier. India primarily imported the cheaper Russian oil to replenish its strategic oil reserves. India also plans to use the cheaper crude oil for further refining and exporting purposes.
Third, UAE. Russia plans to export about 2.5 million barrels of fuel oil in May to the UAE, 125 per cent higher than April levels. These barrels were primarily heading to Fujairah, the world’s third-largest bunkering hub. UAE is importing refined oil as it can be used to make various bi-products that Abu Dhabi plans to eventually export.
How is Russia exporting oil, amid pressure from the West?
First, storing it onboard containers. On 24 May, a report by Reuters mentioned how many Russian flagship vessels on the sea had crude oil stored on them. Reuters reported: “The number of Urals cargoes at sea with no set destination is 15% of the total, also a new high.” This could be seen as a way of transferring oil through the ship-to-ship (STS), not under the radar of the Western countries. Parking these ships across the globe could help quicker sales and offload of Russia’s crude oil.
Second, Ship to Ship loading. Russia is currently using STS loadings off the coast of Greece to export fuel overseas. Since April, shipments of Russian fuel with the destination to Greece reached 0.9 million tons. According to reports, most tankers find their way to Fujairah, the UAE oil hub. A few other tankers also went towards Indian and Chinese ports. In March, Russia had stored its oil in Singapore’s hub to be able to sell its oil even if the West imposed sanctions.
References
Phil Rosen, “Soaring oil and gas prices help Russia more than triple its current account surplus to $96 billion, its largest in 28 years,” Markets Insider, 16 May 2022
Julian Lee, “Russia’s Seaborne Crude Oil Exports Keep Coming,” Bloomberg, 24 May 2022
“Russia to send oil rejected by Europe to Asia, other regions, says Novak,” Reuters, 19 May 2022
“Cargoes of Russia's flagship crude oil at sea climb to record high,” Reuters, 24 May 2022
Chen Aizhu and Florence Tan, “Exclusive: China quietly increases purchases of low-priced Russian oil,” Reuters, 20 May 2022
“Russian fuel oil exports to UAE's Fujairah set to spike in May,” Reuters, 13 May 2022
War in Ukraine: Day 89
By Rishma Banerjee
War On The Ground
President Volodymyr Zelenskyy said that in the last week, 87 people had been killed by an airstrike in the town of Desna. This is the biggest death toll, in terms of a single airstrike, and considerably more than when 52 people were killed in the attack on Kramatorsk in April. He also said that 50-100 Ukrainians could be dying in the Donbas region every single day that the war continues.
Ukraine’s presidential chief of staff, Andriy Yermak, has said that they will not agree to a ceasefire deal that requires them to hand over territory to Russia. This came amidst an increased offensive in the eastern Donbas region and Russia’s claims that Russia is willing to negotiate peace terms. Yermak said: “The war must end with the complete restoration of Ukraine’s territorial integrity and sovereignty.”
On 23 May, Iryna Venediktova, Ukraine’s prosecutor-general, said that as of that day, around 13,000 cases of war crimes were being probed by the country. A court also sentenced Vadim Shishimarin, the 21-year-old sergeant, to life in prison as he was found guilty of killing a 62-year-old unarmed Ukrainian civilian in the Sumy region.
The Moscow View:
Claims by Russia
Boris Bondarev, a senior Russian diplomat stationed in Geneva, resigned in a rare political protest. He is the highest-level diplomat to resign publicly. He released a public statement saying that he was ashamed of his country’s current stances and actions. He also said: “Today the Ministry of Foreign Affairs is not about diplomacy… It is all about warmongering, lies and hatred. It serves the interests of few, the very few people, thus contributing to further isolation and degradation of my country. Russia no longer has allies, and there is no one to blame but its reckless and ill-conceived policy.” He also mentioned that his decision had been taken in February itself, but it took him some time to gather the courage to actually uphold the decision.
On 23 May, the deficiency ministry said that they have fired 4 Kalibr missiles from a submarine in the Black Sea. The aim of the attack was to destroy military equipments of a Ukrainian mountain assault brigade.
Russia’s foreign minister Sergei Lavrov said that Russia will consider the suggestions of renewing ties when such suggestions come from the West. He mentioned the ‘russophobia’ and said that they will now focus on fostering ties with China.
The West View:
Responses from the US and Europe
On 23 May, Poland’s prime minister, Andrzej Duda became the first foreign leader to deliver a speech in Ukraine’s parliament. He spoke about how Ukraine must have the right to decide its own future. He also spoke about how giving up any territory to Russia would affect the West too, and how it might be a “huge blow.”
In an interview, Lithuania’s finance minister, Gintare Skaiste appealed to the European Union to set up a fund to assist countries that are facing a deluge of Ukrainian refugees. He drew the example of turkey in 2016, in this regard. He said that setting up such a fund would help the nations welcoming the refugees greatly, as the average cost of sustaining a refugee for a month is around EUR 500.
Belarus’s president, Alexander Lukashenko, said that he feared that Poland, NATO, and their support for Ukraine were an ulterior motive to ‘dismember’ Ukraine, into the way it was, before 1939.
The Global Fallouts:
Implications of the Ukraine war
On 23 May, the UNHCR reported that in a ‘staggering milestone’, the number of global refugees had crossed the red line of 100 million. The high commissioner for refugees, Filippo Grandi said: “This must serve as a wake-up call to resolve and prevent destructive conflicts, end persecution and address the underlying causes that force innocent people to flee their homes.” The agency also said that out of this 10 million, 6.5 million were people from Ukraine, who have been forced to leave the country since February, with the majority of them entering Poland.
The director of the IMF, Kristalina Georgieva, said that while she was not expecting a recession for the world’s major economies, she still could not really rule one out, given the war in Ukraine, and its economic fallouts. She said: “In a short period of time...the horizon has darkened.”
References
“Ukraine says 87 were killed in Russian air strike last week,” Reuters, 23 May 2022
“Up to 100 Ukraine troops could be dying in Donbas each day, says Zelenskiy,” The Guardian, 23 May 2022
“Ukraine says 13,000 alleged Russian war crimes being probed,” Reuters, 23 May 2022
Shaun Walker, “Ukrainian court sentences Russian soldier to life in prison for killing civilian,” The Guardian, 23 May 2022
“Russia says it fired cruise missiles to destroy Ukrainian weapons, TASS reports,” Reuters, 23 May 2022
Jan Strupczewski, “Moscow not sure it needs resumed ties with West, will work on ties with China - Lavrov,” Reuters, 24 May 2022
Andrew Roth, ‘Warmongering, lies and hatred’: Russian diplomat in Geneva resigns over Ukraine invasion,” The Guardian, 23 May 2022
“Lithuania calls on EU to provide cash for Ukrainian refugees,” Reuters, 23 May 2022
“Lukashenko accuses Poland and NATO of plotting to partition Ukraine,” Reuters, 23 May 2022
“More than 6.5 million people have fled Ukraine, U.N. agency says,” Reuters, 23 May 2022
Diane Taylor, “Number of displaced people passes 100m for the first time, says UN,” The Guardian, 23 May 2022
“Airstrikes target Mykolaiv and Donbas regions; Ukraine EU bid could take 20 years, says French minister – as it happened,” The Guardian, 23 May 2022
“IMF chief does not expect recession but it isn't 'out of the question',” Reuters, 23 May 2022
IN BRIEF
By Emmanuel Royan and Sai Pranav
ENERGY
The EU agrees to implement the Russian oil embargo within a few days
On 23 May, Germany’s economic and climate protection minister Robert Habeck in a panel discussion at the World Economic Forum mentioned that the EU would likely approve the Russian oil embargo in a few days. He said that there would not be any immediate impact on Russia's revenue. He pointed out that capping the global oil price would be a massive blow to Russia’s economy as it primarily depends on energy exports. The European Commission and the US are now working on a proposal that suggests they not pay unfixed prices for the oil but rather cap the global price. He said that the response to Russia’s invasion of Ukraine would happen in a few days in the form of the EU’s embargo on Russian oil. ("German economy minister expects EU embargo on Russian oil 'within days' -ZDF," Reuters, 24 May 2022)
REGIONAL
OSCE expressed regrets over its failed mission in Ukraine
On 23 May, in an interview with Deutsche Welle in Vienna, secretary general of the Organization for Security and Cooperation in Europe (OSCE) Helga Maria Schmid described the termination of the programme's special monitoring mission to Ukraine as unfortunate and "heartbreaking." When Russia invaded Ukraine on 24 February, Schmid decided to evacuate international staff and relocate local employees to Ukraine. The OSCE's largest mission to date was in Ukraine. The mission's interim head, Antje Grawe, said that the unarmed monitors had been on duty 24 hours a day, seven days a week. They went on patrols, mostly in eastern Ukraine, to observe and report on developments on the ground. The OSCE was established during the Cold War in the 1970s as a means of improving ties between East and West. Since then, it has concentrated on problems such as arms control, press freedom, human rights, and free elections. (Marina Strauss, “OSCE, crippled in Ukraine, could fulfill its potential after the war ends,” Deutsche Welle, 23 May 2022)
Turkish leader disregards Greece's prime minister's existence
On 23 May, Turkey’s president Tayyip Erdogan released a statement saying that he does not consider the existence of the Greek prime minister Kyriakos Mitsotakis. His statement was a response to the Greek prime minister allegedly blocking the sale of F-16 fighter jets to Turkey following his visit to the US and meeting president Joe Biden. This comes as both countries’ leaders had agreed not to include a third party in their feud. According to Erdogan, Mitsotakis will no longer exist to him, and Turkey will conduct its business with honourable politicians. Greece will start the procedure to procure F-35 fighter jets from the US by 2030. Greece’s spokesperson Giannis Oikonomou said Mitsotakis defends Greece’s national interest and rights. He further added that their foreign policy would be a “policy of principles,” indicating that there was no foul play.("Turkey's Erdogan says Greek PM Mitsotakis 'no longer exists' for him," Reuters, 24 May 2022)
US delegation to visit Ireland amid post-Brexit trade disputes
On 23 May, the UK foreign secretary Liz Truss was urged by US Democratic congressman Dan Kildee to participate in negotiations with Brussels to settle the unresolved disputes concerning the Northern Ireland Protocol. Premier of Ireland Micheál Martin. Kidlee urged the UK not to take unilateral action and stated: “The only way we can come to agreement, the only way we protect the incredible progress that's represented with the Good Friday Agreement, is face-to-face negotiation.” The statement comes as a US congressional delegation led by senior Democrat Richard Neil is visiting Ireland and Northern Ireland on 23 May to discuss the post-Brexit trading arrangements. (“NI Protocol: Unilateral action 'will not work', say US politicians,” BBC, 23 May 2022)