Russia's energy revenue higher now than just before Ukraine war, U.S. official says & More News Here

A view reveals an area oil refinery in Omsk, Russia June 6, 2022. REUTERS/Alexey Malgavko

WASHINGTON, June 9 (Reuters) – Russia could also be getting extra revenue from its fossil fuels now than shortly before its invasion of Ukraine, as international value will increase offset the affect of Western efforts to limit its gross sales, U.S. energy safety envoy Amos Hochstein informed lawmakers throughout a listening to on Thursday.

“I can’t deny that,” Hochstein informed the Senate Subcommittee on Europe and Regional Security Cooperation in response to a query about whether or not Moscow was making extra money now off its crude oil and fuel gross sales than a few months before the struggle began.

The United States and the European Union agreed to ban imports of Russian fossil fuels and imposed escalating sanctions to punish the nation for its invasion of Ukraine.

While these strikes put a chill on international commerce in Russian fossil fuels, in addition they helped to set off a surge in international costs of oil and fuel. Prices for Brent crude on Thursday have been close to a three-month excessive above $123 a barrel. learn extra

Hochstein mentioned the worldwide oil demand improve from customers popping out of the COVID-19 pandemic was “far greater, stronger than anyone predicted.”

At the identical time, Russia has been in a position to promote extra cargoes to different consumers, together with main energy customers China and India, by providing it at a reduction to grease from different origins.

Hochstein mentioned that whereas these Russian gross sales to China and India have been discounted in contrast with provides from different international locations, the worldwide market value surge means Russia’s revenues are doubtless higher now.

India’s purchases of Russian oil extra than doubled in May from the earlier month to hit a document excessive above 840,000 barrels per day and can doubtless rise once more in June, in line with commodity analysts Kpler.

Hochstein mentioned he has requested officers in India in latest conversations to not buy an excessive amount of Russian oil, and informed them the United States can not ban its purchases of the crude as a result of it has not imposed secondary sanctions on these gross sales. Hochstein mentioned he believes there’s a “ceiling” to how a lot oil India will purchase from Russia, with out offering particulars.

When requested about his view on imposing secondary sanctions on international locations like India, Hochstein mentioned an important factor is to give attention to is lowering Russia’s revenues whereas mitigating the impacts of hovering gasoline costs at residence and on allies.

Hochstein praised new EU sanctions that focus on insurance coverage of cargoes carrying Russian oil. “We’d like to see how we can use those sanctions to affect the broader market beyond the U.S. and Europe so … nobody’s profiteering.”

While Russia supplied about 45% of the EU’s pure fuel final 12 months, Hochstein has been working to lower that dependency by diverting shipments to the EU of liquefied pure fuel (LNG) from the United States, Qatar and Australia. In the primary 4 months of the 12 months U.S. LNG shipments to Europe jumped 18% from the 2021 annual common.

Cutting Europe’s fossil gasoline demand can even assist cut back dependency on Russia, and the United States is working with U.S. non-public corporations and others to spice up the area’s use of good thermostats to extend effectivity in heating and cooling, Hochstein mentioned.

Reporting by Timothy Gardner; Writing by Richard Valdmanis; Editing by Mark Porter, Bernadette Baum and Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

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