Russia's Oil Export Strategy: Two Markets, Two Faces

CIEP, January 2015
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Oil exports from Russia have traditionally been shipped to Europe, due to its geographical proximity and pipeline linkages with Russia’s main producing basins.

As demand in Europe falls, and, conversely, Asian and Chinese demand for crude oil rises, Russia will seek to strengthen  its foothold in the east. In times of economic hardship for Russia, mainly due to economic sanctions and falling oil prices, it is likely that some of the supplies intended for Europe will have to be redirected to China in order to fulfill supply commitments.

This paper examines the drivers behind Russia’s oil export strategy towards its eastern and western export markets, and the ramifications throughout the value chain from a European perspective.