Despite sanctions, Russian gasoline exports surge in 2023

According to the Kommersant business daily, Russian oil companies have seen a 37% surge in fuel exports from January 1 up till May 30 despite the Western sanctions led by Washington over the war in Ukraine. The publication cited an unidentified source familiar with the data.

The January-May 2023 gasoline exports from Russia neared 2.5 million tons 1. Russia exported about 2 million tons of gasoline in January-March, up from around 1.5 million tons in the first quarter of 2022. The boost came ahead of Russia’s plans to halve subsidies to oil refineries from July to rein in its higher-than-forecast budget deficit.

However, with gas price increases and shortages on the domestic market, Russian authorities were also considering banning gasoline exports altogether. According to Reuters, Russia’s gasoline exports dropped almost fourfold to 2,800 tons per day in the first week of June to address the two issues. Still, year-on-year shipments to the domestic market dropped by 8% despite a 2% production boost 1. Russian refineries are estimated to currently hold 1.9 million tons of motor fuel.

The United States, the European Union, Australia and the G7 set a $100 per barrel price cap on oil products including gasoline in early February.

The ban forced Russia, which previously exported 2.5 million tons of gasoline every year to Europe, to reroute exports to other continents including Africa. Africa imported a record 812,000 tons of Russian gasoline — about one-third of Russia’s total exports — over the same period. Nigeria imported 488,000 tons of Russian gasoline in January-March, a more than 1,000% increase from the same time in 2022.

Sanctions imposed by Western nations have cut off $350bn (£275bn) of Russia’s $604bn foreign currency reserves.

The sanctions and voluntary boycotts by European firms in response to Russia’s invasion of Ukraine have led to a considerable diversion of Russian trade with the euro area.