Sanction My Foot! – Russia Makes A Mockery Of Western Oil Sanctions, While China & India Laugh All The Way To The Bank

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Dec 30 2023
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Entering 2024, Russia’s position in the global oil markets remains largely unchanged despite Western financial and economic sanctions. Even the price cap of US$60 a barrel on Russian oil – desperately introduced by U.S. Treasury Secretary Janet Yellenhas little effect on the Kremlin. That’s because oil demand did not change. The only changes are the shift in global supply chains for the commodity.


Sanctions don’t work, especially when you’re trying to impose it on superpower like Russia or China. If sanctions work, dictators in Venezuela, Cuba, North Korea and Iran would be jobless ages ago. If sanctions work, the U.S. would not have to resort to military invasions to neutralize Iraqi Saddam Hussein or Libyan Muammar Gaddafi. If it works, communism would be dead in China long time ago.


In fact, if sanctions work, Putin would not dare invade Ukraine on Feb 24 last year simply because he would be “game over” when the U.S. triggered sanctions on his regime. Get real, Putin isn’t stupid and he knew the consequence of an invasion of Ukraine. He had made all the calculations prior to his “special military operations” to de-Nazify against Ukraine “neo-Nazis”.

India PM Narendra Modi - Russia President Vladimir Putin - China President Xi Jinping

In an interview published by Reuters, Russian Deputy Prime Minister Alexander Novak revealed on Wednesday (Dec 27) that almost all of Russia’s oil exports this year have been shipped to China and India. Moving his chess piece, Putin’s counter-tactic was to effortlessly divert oil exports from Europe to friendly countries China and India after “Sleepy” Joe imposed sanctions.


Essentially, China now accounts for 45% to 50% of Russian oil and fuel exports, while India’s share is about 40%. Combined, both Asia-Pacific nations accounted for 90% of Moscow’s sale of oil, maintaining Russia’s market position as the world’s third-largest oil producer (after the U.S. and Saudi Arabia) and its second-largest exporter. But there is something more stunning.


Before the Ukraine War, India’s imported oil came mostly from the Middle East – just 0.2% of its total oil imports were from Russia. However, in just 2 years, the total share of supplies to India has skyrocketed to 40%. Europe’s share of Russia’s crude exports, which has fallen to only 4-5% from about 40-45%, is taken over by India. So, the Russian oil has merely been diverted from Europe to India.

Russian Oil - Flag

Russia is currently pumping around 10.6 million barrels per day (bpd), an output which includes a shortage of about 500,000 bpd as part of OPEC+ production cuts. That’s higher than its production level in January 2022 – before the invasion of Ukraine. It’s as clear as crystal that the oil sanction has failed spectacularly. Europe now gets its “Russian oil” from China and India instead of directly from Russia.


It was like the European Union cannot survive without McDonald’s, but in an effort to punish the fast food chain has instead paid food delivery service to buy and deliver Big Mac. Of course, it makes the food more costly because the genius Europe had to pay the delivery boys – which in this case are India and China – in order to indulge in the delicious hamburger.


Worse, the embargoes on Russian oil had backfired miserably when it drove up the global oil prices, so much so it triggered inflation and economic meltdown worldwide. Putin could only laugh till he cried as Moscow ends up earning more money for its war chest. Unable to lose face, the Group of Seven (G7) insisted that its sanctions were working and Russia’s economy was collapsing.

Russian Vladimir Putin Laughing

Not only the Russian economy refused to tumble, but its currency- Ruble – did not turn into “rubble”, as clueless U.S. President Biden had mocked and ridiculed. To Washington’s horror, the so-called pariah currency became the world’s best performing currency in 2022. Despite the obvious stupidity of the sanction scheme, the incompetent Yellen bulldozed the price cap on Russian oil.


The half-baked price cap, which comes with a ban on insurance coverage to ships carrying Russian oil, also did not work. Flush with oil profit, Putin responded by buying Greek ships and then transporting oil without insurance to its own ships instead of paying Western-controlled insurers. It unloaded oil in the middle of the night to large Chinese oil tankers and voila, problems solved.


Greek shipowners, who control more than one-fifth of the world’s entire fleet – representing 59% of the total EU controlled fleet – has continued to earn good money in shipping Russian oil. But that was not all. They also discovered that it was more lucrative to sell ships to Russian mysterious buyers, who snatched Greece ships like hot potatoes.

Dark Fleet Tankers - Smuggling and Transferring Sanctioned Oil - 2

Thanks to G7 moron politicians, the Kremlin actually earned even more profits by not paying for insurance as well as Western tanker operators. A “dark fleet” of untraceable operators and discounts helped the Russian oil trade flow despite Western sanctions in the last 2 years. There was absolutely nothing the U.S. and its allies could do as 600 vessels faked their locations while evading oil sanctions.


Russia made nearly US$100 billion in the first 100 days of Ukraine War (it just spent less than US$25 billion on its military in January-April 2022). But China too made easy money by re-routing trade flows to the desperate European Union the very same commodity which the Chinese bought from America and made huge profits without lifting a finger.


Yes, not only the badass Chinese bought and resold American LNG (liquefied natural gas) shipments to Europe, it also made quick profits by buying from Russia before selling it to the euro zone. From the beginning, Russia-China had hatched the scheme to profit from the West. First, Moscow pushed up the gas price by creating a shortage – cutting flows to Europe.

Xi Jinping and Vladimir Putin - Toast 2

As gas prices in Europe skyrocketing after Russia slashed supplies to its biggest market, at the same time, Russia’s giant state-owned energy company Gazprom boosts natural gas shipments to China. Thereafter, China would repackage the natural gas as Chinese LNG (not Russian LNG) to bypass sanctions, and voila, both Beijing and Moscow laughed all the way to the bank.


It’s worth mentioning that natural gas delivery over pipeline should not be confused with liquefied natural gas (LNG). They are gaseous in different form. LNG is natural gas that is cooled to -260° Fahrenheit, the temperature at which natural gas becomes a liquid, so that they can be transported using special LNG tankers. This was how Europe gets its natural gas after Putin turned off the taps.


The best part was when the Western powers had to pretend that the Chinese gas was legitimate – even though it originated from Russia. Not only the West closed one-eye over the Chinese-Russia business trick to profit from Europe’s silly strategic mistake, the British daily newspaper Financial Times had actually praised China as the white knight who saved Europe from a brutal winter last year.

India Import Cheap Russian Oil

Having learned from China, a country called India was also making tonnes of easy money by buying crude oil from Russia before selling the “forbidden Russian oil” to the EU. Once crude arrives from Russia, India either quickly re-exports or processes it first into diesel and gasoline, and then sells it to European customers like France, Belgium and the Netherlands.


The fast learner has become Europe’s largest supplier of refined fuels, according to data from analytics firm Kpler. India made about US$25 a barrel, exactly the same Russian oil that European buyers refuse to buy directly from Moscow for a much lower price. India’s profit margins would be even greater for refined products such as gasoline, diesels or jet fuel.


India has 23 oil refineries capable of refining 249 million tonnes of oil a year, making it the world’s fourth-biggest refiner. Asia’s richest person Mukesh Ambani’s Reliance Industries run the world’s largest refinery in Gujarat, where he has ramped up purchases of Russian oil. Together with India’s second-largest refiner Nayara – of which Russia’s Rosneft owns 49% – Reliance imports 45% of Russian crude.

Russia President Vladimir Putin and India Prime Minister Narendra Damodardas Modi

There’s nothing the U.S. could do to stop its ally India from buying discounted Russian oil and resold it for a huge profit. Washington could only urge New Delhi not to buy “too much” Russian oil. It’s not rocket science how China and India help the Russian economy at a time when the U.S. desperately wanted to cripple it. Rather than isolating Putin, the sanctions have made China and India top customers of Russia.


While the West’s 5 largest oil and gas companies – Chevron, ExxonMobil, Shell, BP and TotalEnergies – saw profits skyrocketed to US$195 billion in 2022 (ExxonMobil alone made US$56 billion in net profit), nearly 120% more than the previous year before the Ukraine War began, Europe had to pay US$1 trillion extra last year as a result of surging energy costs.


Besides paying the extra US$1 trillion, both Europe and the U.S. had to fight escalating inflations, which hit as high as 11.1% (Oct 2022) in the United Kingdom, while achieving none of its embargo objectives. Russia is still funding its war machines today. Europe has merely closed its front door, but quietly opens the back door to welcome Russian oil.

Semiconductor - Chip - Microprocessor

More importantly, Russia-India-China is now closer than ever. Russia possessed all the natural resources that India and China need, especially oil. Meanwhile, China has all the computers, microchips, motor vehicles, machines, parts and nuclear reactors that Russia needs. Before the sanctions, Russia used to get parts from the U.S. and European Union. That’s how screw-up the sanctions are.


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Very appropriate and apt title to this article. Yes, “Sanction Mt Foot”. Nothing US or EU can do to punish Russia. The worst has yet to come for the western nations. There are three personalities you don;t want to mess around. At least, for the next 10 years. Messed around with them at your own perils and sufferings. The three are Putin, Uncle Xi and Mr Kim (aka Fat Dragon) of N Korea. Called them what you may, “Axis of Evil”, Mafia or Dictators. Putin is going to teach these western nations a lesson they would never forget for a 100 years.

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