India and China pamper Russia on energy and military technology
India will resell (sanctioned) Russian crude oil to the West in the form of gasoline and diesel, while China is supplying Moscow with technologies useful for the war in Ukraine. All the details
Through trade in energy and industrial components , India and China are enabling Russia to mitigate – but not fully compensate for – Western economic isolation.
WHAT INDIA DOES AND WILL DO ABOUT OIL PRODUCTS
Since the beginning of the invasion of Ukraine, for example, India has begun purchasing large quantities of cheap Russian crude oil, which it then refines and resells in fuel form to Europe and the United States.
In January – writes Bloomberg referring to Kpler's data – India sent about 89,000 barrels a day of petrol and diesel to New York, the highest value in the last four years. In the same month, flows of low-sulfur diesel to the European continent totaled 172,000 barrels, the most since October 2021.
New Delhi's importance in the petroleum products market seems set to increase, given that the European Union's ban on the import of Russian petrol and diesel came into force on 5 February, following the ban on crude oil last December. Russia is Europe's main diesel supplier, and the availability of alternative supplies is limited.
European rules allow EU member countries to purchase petroleum products from countries outside the bloc even if they are derived from embargoed Russian crude, because the origin of the raw material is not taken into consideration. As a result, India is very likely to further increase its imports of oil – foreign purchases meet 85 percent of the country's needs – from Russia, which is traded in Asia at a steep discount.
INDIA AND CHINA ARE NOT IN CONTRADICTION WITH WESTERN ENERGY PLANS
These energy maneuvers by New Delhi are not in contradiction with the plans of the West.
Indeed, the objective of the European Union, the United States and the rest of the G7 is not to prevent Russia from selling crude oil and derivatives abroad, but to keep the Kremlin's revenue low. This avoids creating a situation of serious supply shortage on the oil market, which would complicate supplies and push up global prices, and at the same time damage the Russian economy, making it more difficult for the Kremlin to finance the war against 'Ukraine.
Russian crude is being sold to buyers in India and China at a steep discount to the international benchmark ; the profit for Moscow, therefore, is limited. The low cost of the material then allows Indian and Chinese refineries to record large profit margins from the resale of fuels: it is a consequence that the West has evaluated and accepted.
Jason Bordoff, an energy analyst at Columbia University, explained that “India's willingness to buy more Russian crude oil at a steep discount is a feature, not a flaw, of Western countries' plan to impose economic damage on Putin without imposing to themselves".
WHAT CHINA IS DOING ON INDUSTRIAL COMPONENTS
As for China – according to an investigation by the Wall Street Journal – the country is supplying Russia with a series of military technologies useful for continuing the invasion of Ukraine, despite international sanctions.
In fact, the analysis of Russian customs data returns tens of thousands of shipments of navigation equipment, jamming systems and components for fighter aircraft from Chinese state defense companies. These are – explains the newspaper – dual-use products, that is, usable in both the commercial/civil and military fields.
– Read also: Do Chinese state-owned companies help Russia in the war? Biden thinks so
Russia is highly dependent on foreign sources for a variety of technologies useful for the defense industry, such as chips, infrared cameras and radar equipment. Despite Western restrictions, these assets still manage to find their way into Moscow's hands thanks to brokerage countries like Turkey and the United Arab Emirates.
CHINESE COMPANIES TRADING WITH RUSSIA
Among the Chinese state defense companies that have sold sensitive components to Russia is Poly Technologies, which last August 31 supplied navigation equipment to Rosoboronexport, the Russian agency that manages the purchase and sale of dual products and services, to be used on M-17 military helicopters.
Also in August, Rosoboronexport also received an antenna from the Chinese electronics company Fujian Nanan Baofeng Electronic, intended to be mounted on a RB-531BE military vehicle for jamming operations. More recently, on October 24, the Chinese company AVIC sold parts for its Su-35 fighter jets worth $1.2 million to AO Kret (a subsidiary of Rostec, a Kremlin-controlled defense company).
Sinno Electronics also traded more than $2 million worth of dual-use goods with Russia through more than 1,300 shipments between April and October. Meanwhile, technology company DJI has shipped orders for quad-rotor drones that the Russian military has used to spot Ukrainian forces and then target them with artillery.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/india-cina-russia-prodotti-petroliferi-componenti/ on Mon, 06 Feb 2023 14:52:40 +0000.