Reuters: Future of Russian Oil Hinges on Trump's Trade Deals

The effectiveness of the Western oil sanctions imposed on Russia is a complex issue, the answer to which depends on what is considered a success. According to a Reuters analysis, it is clear that the sanctions are not exerting significant political pressure on Putin to stop the war in Ukraine, and it is unlikely that they will lead to a substantial reduction in export volumes.

However, the sanctions have another effect. They significantly complicate the process of selling oil for Russia, which could result in a decrease in revenue from energy resources. This also means that Russian oil flows will likely be redistributed again, as some buyers refuse risky deals.

A vivid example of this situation could be the Indian company Reliance Industries. It operates the massive Jamnagar oil refining complex on the west coast of India, with a capacity of 1.24 million barrels per day. Reliance has announced its intention to comply with Western sanctions, which could mean that the company will terminate its contract with Rosneft for the supply of 500,000 barrels of oil per day.

According to the company Kpler, Reliance reduced its imports of Russian oil in October, bringing it down to 591,000 barrels per day, which is significantly lower than the second-quarter average of 766,000 barrels.

If Reliance does indeed stop importing Russian oil, then about 500,000 barrels of free oil per day will appear on the market. The question is, who will buy it? Will India's state-owned refineries be willing to take such a risk? Or perhaps Chinese refineries will be able to increase their purchase volumes?

Much will depend on whether US President Donald Trump succeeds in concluding trade agreements with India and China, and whether Russian oil will become part of those deals. Most likely, both Delhi and Beijing will demand significant concessions from Washington in response to stopping or reducing oil imports from Russia.

For now, Russian oil will most likely continue to flow to world markets. But the main risk is that it will turn into a political tool as part of a broader realignment of world trade by Trump.