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Russia's crude oil and LNG shipments to Asia slip a little in 2024: Russell

Asia's imports of Russian petroleum and melted natural gas are set to log little decreases this year and while coal had a larger drop, there's little evidence that Western sanctions are working well.

Russia has actually come to depend on Asia, the world's biggest buyer of energy commodities, to soak up cargoes that are no longer able to be offered to buyers in Europe and elsewhere as an outcome of sanctions positioned against Moscow in the wake of the February 2022 invasion of Ukraine.

China and India emerged as major purchasers of Russian crude, coal and LNG after the intrusion, taking cargoes due to the fact that of the discount rates on offer.

This dynamic has largely continued in 2024, and while there is most likely to be some small decline in Asia's imports of Russian energy commodities, it's difficult to state that this is since of sanctions or because of other aspects, such as sluggish growth in China, the world's second-largest economy.

Asia's imports of seaborne crude from Russia, the world's. second-largest exporter, are on track to drop to 161.2 million. metric lots in 2024, below 170.6 million in 2023, according. to data compiled by product experts Kpler.

In barrels per day (bpd) terms, Asia's seaborne imports from. Russia are most likely to come in around 3.22 million bpd this year,. down 5.6% or 190,000 bpd from the 3.41 million bpd in 2023.

The bulk of the decline is due to the fact that China, the world's. greatest crude importer, saw arrivals from Russia drop 100,000. bpd to 1.24 million bpd in 2024.

South Korea was accountable for the other significant decrease in. imports from Russia, which dropped from around 100,000 bpd in. 2023 to simply 29,000 bpd in 2024.

India, which now counts Russia as its leading crude supplier,. saw mainly steady imports of 1.76 million bpd in 2024, down. a little from 1.79 million bpd in 2023.

LNG, COAL

Asia's imports of Russian LNG are likewise likely to be lower in. 2024 than the previous year, however just by a small 1.6%.

A total of 14.93 million lots of Russian LNG is likely to. get here in Asia this year, below 15.17 million in 2023,. according to Kpler data.

China is the major purchaser of Russian LNG, with 6.65 million. tons this year, up a touch from 6.63 million in 2023.

The other significant importer is Japan, which buys Russian LNG as. a result of an ownership stake in the Sakhalin-2 LNG task.

Japan's imports of 5.47 million heaps in 2024 are a little. below the 5.90 million in 2023.

Nevertheless, Japan's imports of all grades of Russian coal did. drop considerably in 2024, sliding 75% to 610,000 loads from. 2.42 million 2023.

Overall, Asia's imports of seaborne Russian coal dropped to. 102.3 million lots, down 19.3% from the 126.8 million in 2023.

The decrease was mostly driven by China, with imports. being up to 45.01 million loads in 2024 from 59.19 million in. 2023.

This is likely a price-driven dynamic as China's coal. imports have increased highly up until now in 2024, with official. customizeds information showing a 13.5% boost in the very first 10 months of. the year to 435.4 million heaps.

Russian coal needs to complete versus overland supplies from. Mongolia, as well as seaborne grades from Indonesia and. Australia, with costs from the 2 greatest exporters of the. fuel trending lower over the course of 2024.

Creating Asia's imports of Russian energy. commodities and it's clear that the decrease in volumes in 2024. is small, and even the slightly bigger drop for coal is. discussed by rate competitors, instead of by any sanctions. measures.

It's also most likely that for crude oil, Russia has actually needed to use. discounts in order to maintain volumes. The concern then. becomes whether the discount rate was deep enough to trigger Moscow any. genuine pain from lost income.

The views expressed here are those of the author, a columnist. .

(source: Reuters)