Russia is allegedly violating its agreements with OPEC+ by hiding the true scale of its oil production and sales, according to a new report from the Ukrainian Centre for Defence Reforms. The report claims that Russia has been generating billions of dollars in hidden revenue to finance its ongoing war in Ukraine.
Since the full-scale invasion of Ukraine in February 2022, Western countries have imposed a range of sanctions on Russian oil, including price caps, import bans, and restrictions on maritime insurance and shipping. However, Russia is reportedly circumventing these sanctions through the use of a “shadow fleet” of tankers that covertly transports oil and other goods, allowing the country to maintain vital revenue streams.
The report alleges that Russia exceeded its OPEC+ production quota by at least 2.5 million barrels per day during the first four months of 2024. This comes despite agreements made by Russia with OPEC+ members to cut oil production for the purpose of stabilizing global oil prices.
According to Oleksandr Danyliuk, co-author of the report, this hidden oil revenue could be worth as much as $60 billion annually. “This is the money which are not seen by anyone. And obviously, this is extra funds Russia can use to support the war efforts in Ukraine,” Danyliuk said in an interview.
The report further accuses Russia of concealing the full extent of its oil exports to major consumers India and China. Customs declarations reportedly list zero values for some supply contracts, masking the true volume of oil being sold. “About 1 million barrels per day were actually hidden in that way,” Danyliuk explained.
In addition to using deceptive customs declarations, Russia is said to be employing its shadow fleet to mask the scale of its oil shipments. This fleet is reportedly enabling Russia to ship an additional 1.5 million barrels of oil per day beyond its agreed-upon quota. Danyliuk suggested that the actual volume of hidden oil sales could be even higher.
Although Russia has not formally responded to these allegations, President Vladimir Putin defended Russia’s actions at a September energy forum. He claimed that Russia is fulfilling its energy obligations to the global market and playing a stabilizing role in international energy trade. “Russia fulfills its obligations to supply energy resources to the world market and plays a stabilizing role in it by participating in such authoritarian, qualitative formats as OPEC Plus,” Putin said.
OPEC has not issued a response to the specific accusations raised by the Ukrainian report. However, in a November 3rd press release, OPEC confirmed that Russia, along with Iraq and Kazakhstan, had reaffirmed its commitment to adhere to oil output cuts and compensate other members for any overproduction.
The full extent of Russia’s efforts to circumvent sanctions remains unclear, but these revelations suggest that the country is finding ways to sustain its oil revenue despite the global sanctions regime.
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