OPEC and its economic allies in the OPEC+ bloc have been trying to cut global oil supplies in order to bid up prices lowered by record production from the United States. Russia, for its part, pledged earlier this year to cut crude oil exports as part of that mission. But it has actually been ramping up its exports.
Bloomberg reports that outgoing Russian oil shipments hit nearly 4 million barrels a day this week. That would be the highest level since May of last year. Russia broadcast last month that it would soon be cutting exports by 121,000 barrels a day from the levels of last May and June, but so far this year exports are actually higher than that.
Invading Ukraine has had a tremendous effect on the Russian economy when it comes to both inputs and outputs. On the one hand, military spending has been so pronounced that the International Monetary Fund suggests that it’s actually boosting the gross domestic product of Russia. On the other hand, economic sanctions have made life much harder for consumers and non-military businesses.
Whatever economic stability Russia has been managing to eke out is heavily dependent on its ability to bring in oil revenue. That’s part of why energy infrastructure has been such a big target for Ukrainian drone and missile strikes; if oil is the reason Russia can keep attacking you, then you attack Russian oil.
Now that the European Union, once a major customer for Russian crude, has either stopped buying the stuff or is buying it for much cheaper than Russia would like, China and India have stepped up their purchases. Bloomberg reports that exports heading their way are also at their highest levels since last spring.