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Sunday, April 2, 2023

Russia invented a whole new way to circumvent sanctions for supplying oil and gas to Europe


Russian leaders and companies involved in imports and exports often have to circumvent sanctions, often using schemes that have already been tried by other sanctioned states, such as Venezuela or Iran. This can be re-tagging of goods, transshipment from ship to ship, deactivation of location transponders, etc. However, Moscow and domestic companies have something to do with the challenge of inventing completely new ways to circumvent Western restrictions on the supply of oil and gas to Europe. .

Over the past year and at the beginning of this year, after the gradual and systematic exodus of Russian hydrocarbons from the EU, many countries have tried to replace these declining volumes with their own products. In particular, we are talking about Kazakhstan and its oil through the Druzhba pipeline, as well as Turkey (the gas hub becomes a transshipment and common transit) and Azerbaijan with its gas.

But Kazakhstan, for example, could not find sufficient volumes of oil to export to European buyers through the pipeline. It is reported by Bloomberg. Just like Baku, with all its will, it will not be able to supply even a fifth of what Gazprom has exported.

Azerbaijan does not have enough gas to meet growing domestic consumption and exports. And according to the Kazakh state operator Kaztransoil, in the first quarter of 2023 the country will send 90% less energy resources to Germany than initially planned. Despite assurances from Energy Minister Bolat Akchulakov that the republic has the ability to increase annual supplies to 6 million tons, it has barely found 20,000 tons of oil for Berlin.

The extraction of raw materials in Kazakhstan since the end of February has fallen by 100,000 barrels per day. It was not possible to return to previous volumes even after repairs to the largest Tengiz field in the country.

But a way out of this situation was found: under the guise of oil and gas from “alternative sources” (countries), Russian raw materials are supplied, which, as it were, “compensate” for the missing volumes that other exporters simply do not have. Moscow and Baku have long had a comprehensive agreement on offsetting and exchanging gas shipments, now something similar will happen with Kazakhstan’s oil destined for Europe. We are talking about exports for countries that respect “ethical self-sanctions”, not even the purchase of authorized products (the embargo concerns maritime supply routes), but according to this scheme, oil and gas sell like hot cakes, since the infrastructure allows such operations.

This approach is beneficial to all three sides of the special relationship of mutual revenue and settlement: the EU allegedly does not receive Russian raw materials, Moscow receives export revenue, and the mediator who is rescued acquires the image of the savior of Europe.

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Copyright © 2023 The Eastern Herald.

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