Russia is facing new sanctions for its energy exports. But this time China or India might not be able to save Putin.

Russia is facing new sanctions for its energy exports. But this time China or India might not be able to save President Vladimir Putin.

The European Union will prohibit imports of refined Russian fuels starting February 5. This is in addition to the embargo that it placed on seaborne Russian crude oil, which began in December.

While China and India have snatched up cheap supplies of Russian crude oil that Europe did not want, it is unlikely that they will buy the refined Russian fuels once sold to Europe.

Viktor Katona of Kpler, chief crude analyst, said to Insider that both are net exporters so they don’t need to import more.

Instead, Russian fuels could find buyers in Singapore or Fujairah, the United Arab Emirates. They would then travel to larger Asian markets, but not necessarily the largest, he said.

Russian products could also be exported to West Africa, Latin America and the Caribbean. Europe may start buying more diesel from the US and Asia as a “round-of-musical chairs”, Katona stated.

China and India both produce fuel at their own refineries, which could also be used to supply Europe. According to the Financial Times a Chinese cargo is actually heading to Latvia, despite the additional time and cost associated with shipping over such long distances.

Stephen Ellis, Morningstar energy and utilities strategist, believes that a ban on Russian fuels would also give China and India more leverage to negotiate for the supplies they end up purchasing.

A price cap for Russian fuels is hanging over the fuel market. The EU and G7 will block other countries from accessing shipping and insurance services if they don’t adhere to a limit on refined products, similar to the oil price cap.

EU officials are looking at a cap on Russian diesel at $100 per barrel and Russian fuel oil at $45 per barrel, sources said to Bloomberg.

Moscow would not be powerless. Katona stated that Russia could refine less fuel, but maintain stable oil production, which would result in more crude exports to India or China.

Ellis said that the Kremlin could also “weaponize refined goods by cutting exports.” This would eventually lead to lower supplies for Europe.

He stated that China will most likely have to use its products and reduce refined products exports to the EU.

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