Putin says Russia will find new markets as West rejects oil exports

(Bloomberg) — Russia will find new buyers for its oil, natural gas and coal both at home and abroad as some traditional customers reject its deliveries, said President Vladimir Putin. 

While most countries haven’t imposed direct sanctions on Russian energy sales in retaliation for its invasion of Ukraine, shipments have been curtailed as buyers look elsewhere or grapple with logistical problems. At a meeting with government and company officials on Wednesday, the Russian leader acknowledged publicly for the first time that the nation has export problems that require a solution.

“As for Russian oil, gas, coal, we will be able to raise their domestic consumption, stimulate higher complexity of feedstock processing and raise energy supplies to other parts of the world -- somewhere, where they are really needed,” Putin said at the meeting, which was broadcast on Russian state TV channel Rossiya 24.  

Many key traditional buyers are refusing to take Russian oil cargoes, or have pledged to do so once contracts expire. The nation has been able to redirect some oil flows to Asia, luring buyers with deep discounts. The U.S. has banned outright imports of crude oil and products from the nation, and the U.K. is set to follow suit by year-end.

In the first six days of April, Russian output dropped the most in almost two years to about 10.52 million barrels a day, according to Bloomberg calculations based on data from the Energy Ministry’s CDU-TEK unit. The decline of almost 500,000 barrels a day from March production levels came due to overstocking at Russian oilfields and refineries. The IEA sees the country’s output down by 1.5 million barrels a day for April as a whole. 

On coal, Japan and the European Union are planning to phase out Russian supplies. The EU has indicated that it is open to wider energy restrictions as the Kremlin’s military aggression in Ukraine shows no signs of easing, but hasn’t agreed on any sanctions on natural gas.