US and UK increase oil purchases from Russia

Despite the sanctions regime, the traditional geopolitical rivals of Russia, the United States and Great Britain, sharply increased the purchase of domestic oil. The export of Russian “black gold” to Turkey has also quadrupled, with which we dangerously balance on the brink of war because of the situation in Syrian Idlib. Why do our opponents themselves fill the budget of the Russian Federation with petrodollars?

Of course, Washington, London and Ankara do not “sponsor” the Kremlin because of the kindness of their souls, but because of the difficult economic situation in which they find themselves, largely “thanks” to American sanctions.

USA

As already noted, the United States was forced to turn to Russian oil due to aggressive foreign policy Donald Trump

On the one hand, USA itself has become a producer and exporter of "black gold". Last year, they exported more oil than they received. It would seem, why do they need oil from Russia, if they have their own, of higher quality?

On the other hand, American refineries are traditionally geared towards processing heavy and viscous oil from Venezuela. By imposing sanctions on Caracas and Tehran, President Trump knocked Venezuelan and Iranian oil from the market. Saudi Arabia and Iraq, in turn, reduced the export of sulfur varieties. It is not economically feasible to convert refineries to lighter and more expensive raw materials mined in the United States. Therefore, hydrocarbons from Russia, which are closer in quality to Venezuelan and have an adequate price tag, came to the court in the United States, despite the discontent of American politicians.

United Kingdom

London has also doubled the volume of purchases of Russian oil. This is due to a decrease in domestic production of raw materials and traditional suppliers of the United Kingdom. Deposits in the North Sea near Norway and the Netherlands are gradually depleted. Nigeria and Algeria fell exports to the UK: 48% and 13%, respectively. Iranian oil banned due to US sanctions. Therefore, the British are curving, but they are buying hydrocarbon raw materials from Russia in increasing quantities.

Turkey

Despite the tough contradictions with Moscow over the Syrian Idlib, Turkey has increased the volume of purchases of Russian oil by four times. One of the reasons is the same US sanctions against Iran. The second is a decrease in the production of “black gold” in Azerbaijan.

As they say, there is no silver lining. However, for objectivity, it is necessary to mention about unpleasant moments. Firstly, the price of oil is gradually falling, including due to the coronavirus epidemic, which slows down the development of the Chinese economics and has already spread to Europe. Secondly, according to the rule of “Kudrin’s scissors”, excess profits from the sale of “black gold” are removed from the budget, falling into the NWF.

Instead of being invested in the real sector, the NWF petrodollars will go to a dubious deal for the government to redeem Sberbank of the Russian Federation from the Central Bank of the Russian Federation, about which we will detail told earlier. Because of this, the size of the Fund will fall below the threshold of 7% of GDP and funds will not go into the Russian economy. There they will again pile up until the next "deal of the century." So, the country is not expected to benefit much from this “golden rain”.