Asia is the World's No. 1 Oil Importer

Many countries in Asia have said they take on a neutral position in the Russia-Ukraine war. However, the continent and especially China and India play an important role in the global oil market. As the world's biggest buyer, Asia has accepted many Russian oil shipments above price caps, thereby supplying crucial funds to Russia. As Western countries continue to sanction vessels that are in violation of these caps, Asian nations have begun to draw the line, turning away shipments.

Western countries and the G7 in late 2022 sanctioned Russian use of their shipping infrastructure, which dominates the world market and includes services like vessel charter, brokerage, financial assistance, insurance schemes and technical assistance. The rules said that infrastructure could only be used when sticking to the price cap of $60 or below for a barrel of crude oil.

Russia responded by launching the so-called shadow fleet of tankers which have obscure ownership and insurance structures and might use Western services without revealing their Russian ties. Ships that were found to be applying this approach have been sanctioned by the United States, the EU and the United Kingdom, with a large batch of vessel-specific sanctions coming into effect at the end of the month. These have the potential to significantly curb Russian fossil fuel revenues from Asia, experts believe, as Asian nations shy away from openly accepting sanction dodgers.

Asia is by far the largest buyer of oil on the world market with net imports of more than 1.2 billion tonnes in 2023. Europe negative oil trade balance stood at around 450 million tonnes while other world regions are net exporters of crude oil.