Increasing direct and indirect U.S. pressure on Russia's oil and gas industry has reopened new channels for U.S. exports of crude oil and petroleum products. While officials in Moscow emphasize that Washington's aggressive policy toward the Russian energy sector is in essence aimed at boosting U.S. exports, this remains debatable. What is undeniable, however, is that U.S. producers have already started reaping the benefits of these policies recently.
India is a recent example. The world's second-largest oil importer increased its purchases of U.S. crude after coming under intense trade pressure from President Donald Trump in August for buying Russian oil.
Oil exports from the U.S. Gulf Coast to India jumped in October to a four-and-a-half-year high of about 550,000 barrels per day, more than double the previous three-month average, shipping data from analytical research firm Kepler shows. This includes about 85,000 bpd of Canadian oil re-exported from the same coast. However, the share of US crude in India's import mix has risen significantly, with US Midland's purchases reaching 270,000 bpd in October, the highest level in three years, according to Kepler data.
The last month in which India's imports of US oil exceeded 500,000 bpd was February 2022, coinciding with the start of Russia's large-scale invasion of Ukraine, when Russian companies were forced to make deep cuts to the price of their crude and look for alternative markets for their exports.
After discounted Russian oil managed to capture a large share of the Indian market, U.S. crude completely disappeared from India's imports in January 2024. Although New Delhi continues to buy Russian oil, the fact that Rosneft and Lukoil are under U.S. sanctions may prompt India to increase its purchases of U.S. crude in the coming period.
Brazil has increased its imports of U.S. oil products after Russian refining capacity - the world's third-largest - fell about 10% below normal levels due to major refinery outages, many of which were caused by Ukrainian drone attacks.
According to Kepler data, Brazil's imports of US diesel and gasoil jumped to an average of 150,000 barrels per day in September-October, up two-thirds from the previous three-month average. Shipments are expected to remain at the same levels in November, and possibly rise in December as sanctions on Rosneft and Lukoil, Russia's two largest diesel exporters, begin to take effect.
Prior to 2023-when the European embargo on Russian oil products was imposed and they shifted to other markets-the United States exported about 140,000 bpd of diesel and gas oil to Brazil. But Russia's strong entry into the market pushed US exports down to 60,000 bpd in 2023 and 40,000 bpd in 2024, while Russia's exports to Brazil rose from near-zero to about 185,000 bpd in 2024.
Bottom line: Every unit of energy Russia loses in export markets is another opportunity for the U.S. to strengthen its position in global energy trade.
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