Speaking at the inaugural meeting of Russia’s 2024 BRICS Chairmanship, President Vladimir Putin reaffirmed commitment to BRICS’ motto “Strengthening Multilateralism for Just Global Development and Security” and emphasized the priority of constructive cooperation with all countries concerned.
The question is how Russia will work over the year to achieve this goal amid tumultuous global geopolitical shifts.
In recent years, despite a barrage of Western sanctions, Russia has demonstrated resilience and ability to cope with various challenges, asserting its dominant and responsible position in the global energy system. This resilience is indicative of Russia’s strategic importance and adaptability to geopolitical shifts, as well as its role as a key player in shaping the nature and trajectory of the emerging international energy landscape.
In March of this year, Russia’s international seaborne crude oil exports surged to the highest level, with shipments reaching 590,000 barrels per day. This increase has reaffirmed Moscow’s commitment to OPEC+ production restrictions notwithstanding Western sanctions targeting Russian energy exports. Prior to this, Russia had maintained the position of the biggest global crude oil supplier for the 15th consecutive month until December 2023, as estimated by Vortexa, a London-based analytics platform for energy and freight markets.
Russia has managed to adapt to the changes by well-calculated measures, including by diversifying petroleum exports and exploring new markets beyond traditional ones, and maintaining crude oil sales at 10 MMb/d in 2023 (according to Rosstat reports). Despite transportation and shipment challenges, exports of gasoline, diesel, and fuel oil have shown consistent or growing dynamics. The diversification has effectively countered the impact of the EU’s embargo, with overall energy production levels sustained and oil production falling to just 5% from pre-sanction level.
In a strategic maneuver, Rosneft and Indian Oil Corp have shifted to using the Asia-focused Dubai oil price benchmark over the Europe-dominated Brent benchmark. Concurrently, China has significantly increased its purchases of Russian Urals, which are priced against either dated Brent or ICE Brent, which has led to a several-fold increase in purchases by both countries. This has encouraged Russia’s bent towards accessing fast-developing markets, primarily in Asia, but not exclusively.
Russia’s influence in the energy market is expanding globally. An illustrative example is Latin America. In 2023, Russia became the largest exporter of diesel fuel to Brazil, having increased supplies by 5,900% (from 101,000 to 6.1 million tons) from the previous year, according to Kpler statistics cited by The Financial Times. Similarly, Cuba relies heavily on Russian crude oil imports to meet electricity needs amid economic challenges and U.S. sanctions. In Venezuela, Russia’s substantial investments and loans bolster its position in the oil market, with Roszarubezhneft accounting up to 15-20% of Venezuela’s total oil output.
Furthermore, Russia’s growing cooperation with Central Asian countries in gas transit and oil supply shows its increasingly firm foothold in the region. For instance, Russia’s oil exports to Kazakhstan reached $1.5 billion in 2023 (against $1.2 billion in the previous year), indicating the strengthening of the economic ties. Similarly, Russia’s cooperation with Uzbekistan in establishing a tripartite gas union, alongside Kazakhstan, highlights Russia’s expanding influence. This is also evidenced by the recently signed contract between Gazprom and Uzbekistan for gas transit services.
African nations show a keen interest in engaging with Russia too, as they recognize the potential benefits of cooperation in the energy sector. Russia reciprocates by deepening its engagement with these nations, fostering positive and interdependent partnerships. Notably, Egypt has emerged as a key recipient of Russian energy investments, with projects like the El Dabaa Nuclear Power Plant, involving investments worth $30 billion, which signals deepening cooperation in the sector. In Sudan, Russia’s efforts to establish a sea port, with an estimated investment of $500 million, underscore its strategic interest in securing access to African energy resources. Additionally, Algeria has seen increased collaboration with Russia in natural gas production and exploration, with joint ventures such as the In Salah CCS project contributing to mutual economic growth. These developments exemplify Russia’s commitment to expanding its energy footprint in Africa, aligned with its broader goal of diversifying energy partnerships worldwide.
Vladimir Putin’s reelection as president will let him translate his vision of BRICS into tangible engagements and partnerships, particularly in the energy sector, where Russia’s role is both crucial and expanding.
Amidst the growing global demand for energy and search for dependable and diversified energy sources, Russia’s strengthened position as a key global energy supplier is evident in its record high international seaborne crude oil exports, sustained production levels notwithstanding Western sanctions, and its recognition by the developing world as a true energy champion.
President Putin’s active engagement with BRICS Plus and extensive involvement in Africa signal a transformative approach to reconfiguring global energy alliances and order. This strategy not only helps diversify the global energy supply chains but also nurtures an ecosystem of mutual energy security and economic prosperity among developing nations. It is in line with Russia’s broader economic interests and geopolitical aspirations and paves the way for a more inclusive global energy framework that challenges traditional hegemonies and advocates a balanced, multipolar world order.
