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27 Feb, 2020 13:10

It's just business: US & Britain buying more and more oil from Russia

It's just business: US & Britain buying more and more oil from Russia

Russia more than doubled crude oil supplies to the United States and Britain in 2019, data from the Federal Customs Service (FCS) has revealed.

A fall in prices for the Russian Urals oil, combined with US sanctions against Venezuela and Iran, were among the reasons for such an increase in purchases.

According to the data cited by business news outlet RBC, in October Russia became the second-largest supplier of oil and petroleum products to the United States. At the end of 2019, crude oil exports from Russia amounted to almost $2.2 billion, 2.4 times more than in 2018. In physical terms, the volume of oil exports from Russia to the US surged from 1.8 million to 4.7 million tons.

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Deliveries of Russian crude to the United Kingdom have more than doubled, both in value terms (from $493 million to $1.2 billion) and in physical terms (from 0.98 million tons to 2.4 million tons).

The fact that the US and Britain started buying more Russian crude is not politically motivated, says Andrei Polishchuk, an analyst at Raiffeisenbank. This is “simple economics,” he told RBC, explaining that countries choose from whom to buy solely from the point of view of profit.

“Oil is sold by traders; there are very few direct contracts. Therefore, first of all, the price is the major factor. If it is more attractive than from other sellers, then buyers prefer Russian oil,” he said.

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Polishchuk noted that sanctions against Venezuela were one of the reasons that the United States began to search for additional volumes of oil, “and Russian oil turned out to be more attractive” under those conditions.

The total volume of Russian crude oil exports, according to the FCS, amounted to $121 billion in 2019. The largest buyers were China, the Netherlands and Germany.

The United States accounted for 1.8 percent of Russian oil sales last year, the United Kingdom for 0.9 percent, and Turkey for three percent.

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