Sanctions on Russian Oil Drive Restructuring of Global Supply Chain, India and China Benefit

Russia's Caspian Stream tanker approaching the LUKOIL ice-resistant fixed platform LSP-1, at Korchagin's oil field outside Astrakhan on April 9, 2011. US and European energy sanctions on Russia have driven record discount prices for Russian oil. Currently, heavily discounted Russian crude oil and products are flowing to China and India. Mikhail Mordasov / AFP

News Analysis

The European Union applied sanctions on the importation of Russian oil to reduce its dependence on Russia as a source of energy. The EU sanctions combined with those applied by the United States have caused Russia to deeply discount its oil prices. The discounts have provided an opportunity for China and India to increase the volume of oil imported from Russia.