The Kremlin Has Never Been Richer Thanks To A US Strategic Partner

Russia is now in its third year of the Ukraine conflict with an unexpected financial boon, having amassed a historic $37 billion from crude oil exports to India last year, as per new findings. A segment of this oil was refined within India itself, with products exceeding $1 billion in value eventually reaching the U.S. market, boosting Russian financial reserves despite the ongoing war.

This surge in revenue results from India’s decision to elevate its Russian crude oil purchases, now over 13 times higher than before the conflict, as noted by the Centre for Research on Energy and Clean Air (CREA) in their exclusive report to CNN. As Western buyers retract due to sanctions imposed on Russia post its Ukraine invasion, India, a strategic U.S. ally, compensates for the shortage, the analysis revealed.

The sale of Russian crude to India isn’t sanctioned and remains completely legal. However, specialists have scrutinized the shipping tracks and speculate that the large volume could be attributed to a “shadow fleet”. This fleet is Moscow’s strategy to shield trading operations and partners, thereby boosting the Kremlin’s monetary gains.

CNN recently witnessed near the Greek port of Gythio, what seems to be a part of this shadowy commerce. Two tankers—one significantly larger than the other—engaged in a mid-sea oil transfer, a practice sometimes intended to obscure the origin and destination of the cargo. Satellite imagery from March 20 supports this observation, showing two vessels off Greece’s southern coast involved in the clandestine trade of Russian fuel oil, a technique becoming exceedingly common.

These two involved tankers have checkered pasts—originating from Russia, one is owned by an Indian company implicated in sanctions-related misdeeds, while the previous owner of the other is currently under U.S. sanctions, according to information from the shipping monitor Pole Star Global. “Though such transfers can be lawful, they’re often employed to sneak past sanctions,” says David Tannenbaum from Pole Star. “The layering of ships in this transfer network serves to muddle the oil’s origins and its final buyer,” he adds.

Weekly, the Laconian Gulf in Greece witnesses many of these exchanges as it makes a convenient spot en route to the Suez Canal and onwards to Asian markets. The U.S. has also intensified its efforts, with new sanctions rolled out in February targeting entities aiding the movement of Russian crude. Moreover, the U.S. spearheaded a coalition capping Russian crude prices at $60 per barrel and restricted trade facilitation support from shipping companies and insurers. This move precipitated the birth of the shadow fleet, making it increasingly arduous to track and price Russian oil barrels accurately.