EU takes bulk of €63bn in Russian fossil fuel exports during Ukraine war


Russia has exported €63bn worth of fossil fuels via ship and pipelines since the invasion of Ukraine, according to new data, with most going to the EU.

The largest importers of Russian coal, oil and gas were Germany, Italy and China, according to an analysis of pipeline and seaborne trade by the Centre for Research on Energy and Clean Air.

Vessels chartered by energy companies including ExxonMobil, Shell and TotalEnergies continued to carry Russian fossil fuels in April, said the group, which has tracked ships leaving Russian ports since late February.

The invasion of Ukraine has triggered a swath of western embargoes and sanctions on goods and individuals. But the Crea research highlights how Moscow has continued to bring in revenue from some of the very nations seeking to isolate it.

Some western companies, including Shell, have committed to withdraw from the country.

The EU has pledged to end its reliance on Russian fossil fuels and to accelerate the transition to clean energy. The bloc has banned coal imports from Russia, with a potential ban on oil looming and gas also coming under the spotlight.

Poland and Bulgaria this week said Russia intended to suspend the flow of gas to both countries as part of a dispute over payments.

Lauri Myllyvirta, lead analyst at Crea, said that although the EU had been “talking about reducing reliance on Russian gas”, the plans being drawn up were long term, since policymakers “don’t think in days and weeks”.

That had allowed companies to continue buying fuel from Russia and fulfilling existing contracts for cargoes from the country in the short term, he said, with sky-high energy prices pushing up their value.

The EU has imported 71 per cent of Russian fossil fuel exports since the start of the invasion, Crea said. About a quarter went to just six EU ports, including Rotterdam and Maasvlakte in the Netherlands and Trieste in Italy.

The researchers found that daily deliveries of oil to the EU fell 20 per cent during the first three weeks of April compared with the month from January 23, while those of coal dropped 40 per cent.

But deliveries of liquefied natural gas to the EU increased by 20 per cent and jumped 80 per cent to countries outside the EU, the analysis showed.

The increase in LNG was “unfortunately to be expected”, said Myllyvirta. “Countries have been trying to get [LNG] cargoes from wherever they can.” 

Crea also noted a “sharp increase” in the number of ships leaving Russian ports without a definite destination, which it said suggested that Russia was struggling to find buyers for cargoes that had been rejected by European purchasers.

Finding alternative buyers would in some cases be challenging, since the LNG terminals or pipeline connections needed to divert exports elsewhere often “do not exist”, the report said.

Georg Zachmann, a senior fellow at think-tank Bruegel, said it would be “impossible” to build a major new pipeline in the short term: “That is a project for half a decade or so”, and one that would be “very capital intensive”.

Crea also identified fossil fuel deliveries to facilities linked to oil majors, such as the Maasvlakte Oil Terminal that is partially owned by Exxon, Shell and Total. Ships chartered by the three companies had “continued to carry Russian fossil fuels in April”, the report said.

Total announced in March that it would “no longer enter into or renew contracts” for Russian oil and petroleum, and would halt all purchases “as soon as possible” and by the end of 2022 “at the latest”. However, the group still has some active oil and petroleum contracts that end this year.

Likewise, Shell announced after the invasion that it planned to “withdraw from Russian oil and gas”, but said it was “legally obliged” to take delivery of fuel it had bought under contracts signed before the war.

Both companies declined to comment.

Exxon said it supported the “internationally co-ordinated efforts to bring Russia’s unprovoked attack to an end”, and would not invest in new developments in the country.

“Deliveries are fulfilling contractual obligations that were in place prior to the Russian invasion and are not subject to sanctions at this time. We have not made any new contracts for Russian products since the Russian invasion,” the company added.

Zachmann said the impact of voluntary commitments by companies to cut ties with Russia would be limited. Even if some avoided trading fuels from the country, less scrupulous groups and “rogue traders” may step in to handle the cargoes, he said. To avoid that, “you would need public policy to kick in”.

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