In response to Western economic sanctions, Russia had announced that it would cut its oil production. But this cut has so far only been partially implemented, according to the International Energy Agency, IEA.
According to the IEA, Russia has only implemented part of the announced cut in oil production. In response to Western sanctions, Russia announced in March that it would cut production by 500,000 barrels a day.
According to the Energy Agency, production in April averaged around 9.6 million barrels per day. The IEA announced this today in Paris. Oil production was only 200,000 barrels per day lower than before the cut. “In our estimation, Moscow has not fully implemented the announced production cut of 500,000 barrels per day,” write the IEA experts in the monthly report.
Russia needs oil revenues
Russia still needs the income from the oil business, for example to finance the war against Ukraine. According to IEA estimates, Russian oil export revenues rose by $1.7 billion to $15 billion in April.
Compared to the previous year, however, Russia had to forego around a quarter of its oil revenues, according to the experts. This is also due to the fact that the country, following the oil embargo imposed by the EU at the end of 2022, is currently having to offer crude oil at significantly lower prices than a year ago. According to media reports, Russian oil exports have increasingly been directed towards China, India and Turkey in recent months. In the absence of existing pipelines, deliveries have to be made by sea using tankers.
EU wants to scrutinize Indian oil products
Some of the Russian oil deliveries to India apparently find their way back to the EU after processing. This has now been criticized by EU foreign policy chief Josep Borrell. Borrell calls for action by the European Union against Indian fuel produced from Russian oil. “If diesel or petrol comes to Europe from India and is made with Russian oil, it is certainly circumventing sanctions and member states must take action,” the EU’s chief diplomat told the British Financial Times.
If India uses its Russian oil purchases to be a trading hub where Russian oil is refined and refined products are sold to the EU, then the EU must act. Borrell suggests that the EU tighten controls on buyers of Indian fuels suspected of being made from Russian crude. Access to cheap Russian crude has boosted Indian refiners’ production and profits, allowing them to competitively export refined products to Europe.
VW allowed to sell assets in Russia
Meanwhile, the Volkswagen Group has received approval to sell its assets in Russia, according to media reports in Moscow. They will be sold to the Russian car dealer Avilon for 125 million euros. According to the Interfax news agency in Moscow today, citing negotiating circles, the government commission for the control of foreign investments has approved a corresponding application.
VW had been active in Russia for many years and opened its own factory in Kaluga in 2007, almost 200 kilometers southwest of Moscow. In the spring of 2022, after the start of the Russian war of aggression against Ukraine, VW, along with other western carmakers, stopped production in Russia. The state-of-the-art factory is considered to be VW’s most important asset in Russia.