Energy Front

China reduces Russian coal purchases for the third consecutive year: 15% drop in early 2026

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China, the largest importer of Russian coal, continues to systematically reduce its purchase volumes. According to data from the General Administration of Customs of the PRC, for January–February 2026, supplies of all types of coal from the RF decreased by 15% in physical terms (to 10.8 million tons) and by 17% in monetary terms (to $1.1 billion). Decline dynamics and historical context: Analysis and Conclusion: Russian coal is losing competitiveness in the Chinese market due to the reinstatement of import duties in the PRC, high logistics costs, and the limited capacity of the Eastern Range. Beijing is diversifying its supplies, favoring cheaper coal from Indonesia and Australia. For the Russian economy, this signifies the “clogging” of a key export artery: mining and transportation costs are rising faster than export revenues, turning the industry into a financial risk zone.

EU Postpones Launch of Plan for Complete Phase-Out of Russian Oil

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The European Commission (EC) has removed the draft law on a total and permanent ban on Russian oil imports from its agenda for April 15. A new date for the review has not yet been set, according to EC spokesperson Anna-Kaisa Itkonen. Despite the postponement, Brussels officially maintains its intention to legally cement the oil embargo by the end of 2027. Key Factors for the Delay: A similar plan for a complete phase-out of Russian gas by 2027 has already been approved; however, the situation in Iran now threatens the implementation of those schedules as well. Analytical Summary: The pause in adopting the oil embargo is a forced admission by Brussels that Europe’s energy security has fallen hostage to a major war in the Middle East. Failure of the Substitution Strategy: Relying on Persian Gulf countries as a “lifeline” has proven unreliable under the conditions of a direct military clash involving Iran. The EU finds itself in a stalemate: ideologically, it is bound to codify the break with Moscow, but physically, it cannot afford to lose Russian barrels at a time when supplies from Saudi Arabia and Qatar are at risk of disruption. Tactical Victory for Moscow: For the Kremlin, this delay is a temporary but crucial respite. While the “Iranian fire” inflates prices and disrupts the plans of European strategists, Russia maintains a window of opportunity for exports, even under sanctions pressure.

Russian Oil Prices in India Surpass $120 per Barrel

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The price of Russian Urals crude in Indian ports reached a record $121.65 per barrel at the end of last week. According to Bloomberg and Argus, for the first time in four years, Russian oil is trading at a premium rather than a discount compared to the Brent benchmark. Key metrics and dynamics: Analysis and Conclusion: The oil market situation in March 2026 demonstrates a paradoxical effect: the war in Iran has transformed Russian oil from a “toxic asset” into a scarce resource for which buyers are willing to overpay. The temporary easing of restrictions by Washington has effectively neutralized the “price cap” mechanism. For Russia, this means a massive influx of foreign currency, allowing it not only to plug budget holes but also to aggressively fund military and strategic projects (like the “Rassvet” satellite constellation). However, this stability is extremely fragile and depends entirely on the duration of the Middle East conflict and US political maneuvering.

Russia Halts Oil Exports via Baltic Sea Ports Following Massive UAV Attack

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Russian oil exports through key Baltic Sea terminals have been completely paralyzed following an unprecedented drone attack on the Leningrad region. According to Reuters, citing industry sources, operations at the ports of Primorsk and Ust-Luga have been suspended. Up to half of Russia’s total seaborne crude oil exports pass through these hubs. Details of the incident: The situation is complicated by the fact that Russian oil companies currently lack alternative routes of such capacity. Analytical summary: The total halt of Baltic exports is a “black swan” for the Russian budget and a critical blow to energy logistics. The Baltic was the last relatively safe window for foreign currency earnings, and its closure due to a massive UAV attack shifts the economic confrontation into a phase of physical destruction of export potential. The loss of 1.7 million barrels per day will not only trigger a spike in global oil prices but also place immense pressure on the domestic storage system: if exports do not resume within days, companies will be forced to shut in wells. This is a clear demonstration that air defenses are unable to ensure the invulnerability of the facilities providing the country’s primary income.

Putin Gifts China Another $2.2 Billion Through Oil Discounts

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Russian oil companies continue to lose billions of dollars by providing forced discounts to Chinese refineries. According to experts from the Gaidar Institute, based on Chinese customs statistics, the total amount of lost revenue due to these discounts reached $2.2 billion in 2025. The dynamics of the oil industry’s losses from “friendly” discounts are as follows: The cumulative total over four years shows that Beijing has saved nearly $12 billion (about a trillion rubles at the current exchange rate) on Russian oil. This sum is comparable to the annual budget of the Moscow Region or five annual budgets of regions like Volgograd or Voronezh. Experts note that the discount size grew sharply at the end of last year following the tightening of U.S. sanctions and the blacklisting of Rosneft and Lukoil. While the discount was around 3% in early 2025, it reached 8.3% relative to supplies from other countries by the fourth quarter. Analytical summary: The increasing oil discounts for the PRC expose Moscow’s critical dependence on a single major buyer. Beijing is successfully monetizing Western sanction pressure on the RF by demanding deeper discounts for the risk of working with toxic assets. The situation where Russian state corporations subsidize the Chinese economy at the expense of their own regional budgets is becoming chronic. For the global market, this is a signal that the “pivot to the East” has turned into a one-way channel for extracting resources, where Russia has lost market leverage over pricing and has effectively shifted into the role of China’s raw material appendage under strict price dictates.

Lukoil Reports First Loss in 30-Year History

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Lukoil, Russia’s largest private oil company, ended 2025 with a net loss of 1.059 trillion rubles. According to the published IFRS financial statements, this is the first annual loss in the company’s three-decade history. For comparison, even during the 1990s crisis when Russian oil prices dropped below $10 per barrel, the company remained profitable. In the 2020 pandemic year, Lukoil earned 15.2 billion rubles, and in 2015, amid the first wave of sanctions, its net profit was 291.1 billion rubles. The main cause of the financial collapse was a massive write-off of foreign assets totaling 1.66 trillion rubles. This includes oil fields, refineries, and gas station networks across 11 countries. Following the imposition of blocking U.S. sanctions, the activities of its foreign subsidiaries were paralyzed, and attempts to sell assets with a book value of $22 billion are being blocked by the U.S. Treasury. Key indicators for the past year: Analytical summary: The collapse of Lukoil’s financial performance represents a tectonic shift for the Russian economy. For the first time in 30 years, the “money machine” that survived the 1998 default and all global crises has officially acknowledged the loss of its international empire. The asset write-off of 1.66 trillion rubles is a de facto admission that the company’s foreign network no longer belongs to it functionally. For the EU, this is a signal that the sanctions strategy has achieved its goal: Russian oil majors are losing the ability to operate in the global market. The inability to sell blocked assets turns them into “dead capital,” depriving the Russian budget of massive dividend revenues and calling into question the sustainability of the entire private oil production model in the country.

France Seizes Second Russian “Shadow Fleet” Tanker Since the Year Began

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On the morning of March 20, the French Navy intercepted the tanker Deyna, identified as part of the Russian shadow fleet, in the Mediterranean Sea. President Emmanuel Macron announced the seizure on X, stating that the war in Iran would not distract France from supporting Ukraine. Macron emphasized that vessels circumventing international sanctions and violating maritime law profit from war and fund Russia’s military actions—a practice France vows to stop. The Deyna was sailing under a Mozambique flag from Murmansk and was suspected of using a “false flag.” The operation was conducted alongside British allies. This marks the second seizure of a tanker carrying Russian oil within a week (following Sweden’s detention of the Sea Owl) and the second such incident involving the French Navy this year. Analytical summary: The seizure of the tanker in March 2026 indicates that NATO countries have entered an active phase of “hunting” Russia’s shadow fleet in open waters. Deploying naval forces to verify the registration of vessels under suspicious flags represents a significant escalation beyond mere economic sanctions. For Moscow, this creates a critical logistical bottleneck: the Mediterranean is becoming a “gray zone” where any tanker lacking transparent insurance or a valid flag faces the risk of arrest. The joint Franco-British operation underscores Western resolve to cut off the Kremlin’s financial lifelines, despite other global distractions.

Deripaska’s Aluminum Empire Turns Unprofitable for the First Time in 11 Years

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The Russian aluminum giant Rusal reported a net annual loss of $455 million for 2025, marking its first negative result since 2014. Although revenue increased by 17% to $14.1 billion due to a late-year spike in global metal prices, it was not enough to offset a massive surge in costs. The company’s finances were hit by a 71% increase in debt servicing costs, a 12% rise in production costs, and a 25% jump in commercial and logistics expenses. Consequently, Rusal reduced aluminum production by 1.9%, citing “capacity optimization.” Sanctions have also shifted sales geography: the European market share dropped from 21% to 14%, while China now accounts for 35% of all exports. Analytical summary: Rusal’s loss in March 2026 clearly demonstrates that even high global prices cannot compensate for the structural flaws in Russian industry. Rising debt and logistical bottlenecks are making metal exports increasingly unprofitable. While pivoting to China saves sales volumes, it leaves the company heavily dependent on Beijing’s pricing power. Even with existing EU quotas, the toxic sanctions environment has driven the “cost of survival” high enough to wipe out all profits.

China’s State Refiners Resume Russian Oil Purchases Amid Middle East Supply Crunch

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China’s state-owned oil companies, which suspended Russian oil purchases late last year, are returning to the market. According to Reuters, trading arms of Sinopec and PetroChina issued inquiries for Russian crude this week for the first time since November, taking advantage of a relaxation in U.S. sanctions. Indonesia, Thailand, and Pakistan are also reportedly in similar talks. The primary driver is a severe physical supply shortage. The blockade of the Strait of Hormuz, a transit point for about 20% of global oil and gas, has sharply restricted access to Middle Eastern supplies. Major exporters have been forced to scale back: Saudi Arabia cut production to 8 million barrels per day, while the UAE temporarily lost 60% of its output. Under these conditions, Russian crude remains the most viable alternative, staying cheaper than competing grades from Brazil and West Africa. Analytical summary: The return of China’s state giants to Russian contracts in March 2026 is a direct consequence of Middle Eastern instability, which has proven more effective for Moscow than any lobbying efforts. For the EU, this signals that the global energy deficit provides a “window of opportunity” for the Kremlin to bypass technological and financial isolation. However, this success is situational: China is acting out of energy survival rather than political solidarity. Russia’s reliance on Asian demand only deepens as the Strait of Hormuz remains blocked, granting Beijing more leverage to demand even steeper discounts once the crisis subsides.

Russian oil exports show strongest growth in over a year following outbreak of war in Iran

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The war in Iran has triggered a sharp increase in demand for Russian crude and a surge in Russian budget revenues. According to Bloomberg vessel-tracking data, average daily oil exports for the week ending March 15, 2026, jumped to 4 million barrels. The weekly increase of approximately 1.1 million barrels marks the most significant rise in supply volumes in over a year. Simultaneously, a record growth in export revenue has been recorded. For the reported week, the value of exported oil surged by $890 million compared to the previous period, reaching $2.07 billion. This weekly revenue jump is the highest since the start of the full-scale war in Ukraine. Middle East crisis impact on the market Destabilization in Iran has led to a sharp narrowing of global supply, an opportunity Moscow has quickly seized. Despite sanction pressures and Western efforts to cap prices, the supply deficit is forcing buyers toward Russian oil grades, translating into windfall profits for the Russian energy sector. The rise in prices at Russian ports, combined with increased physical shipment volumes, provides the Kremlin with a financial “buffer” to compensate for losses in other economic sectors. The current market situation effectively neutralizes efforts to isolate Russia energetically, turning the regional conflict in the Middle East into a key factor for the system’s financial stability. Analytical summary: The sharp increase in oil revenues in March 2026 due to the war in Iran provides Russia with a temporary but powerful resource to sustain military operations and cover budget deficits. For the global community, this means that geopolitical instability in the Middle East directly undermines the effectiveness of the sanctions regime, creating conditions for an influx of unplanned hard currency revenue into the Russian treasury.