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Hydrocarbon trade deflection and supply‑chain trade restructuring under sanctions imposed during theRussia–Ukraine conflict

Author

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  • Maribel Aponte-Garcia

    (University of Puerto Rico, San Juan, Puerto Rico)

Abstract

In response to international sanctions, Russia has restructured its hydrocarbon commerce through trade deflection, redirecting exports from sanctioning to non-sanctioning countries. Theresearch aimed to analyze hydrocarbon trade deflection under theRussia–Ukraine conflict within thecontext of theChina–Russia Strategic Partnership and BRICS, and to assess therestructuring of Russia's crude oil and natural gas supply chains from 2020 to 2023. Two questions were addressed: Whether trade deflection shifted towards non-sanctioning countries, including China and other BRICS countries; whether Russia's oil and gas supply chains were restructured towards these regions? Design incorporates themethod developed by theauthor which generates and utilizes an integrated database of Bill of Lading and export data to analyze supply-chain trade restructuring, identifying specific shifts in trade flows by product, country, and enterprises. Findings reflected that after sanctions were imposed in early 2022, Russian hydrocarbon exports to sanctioning countries declined sharply, while exports to non-sanctioning countries, particularly China and India, increased significantly. Findings demonstrate theeffectiveness of trade deflection as a strategic response to sanctions. This strategy has mitigated theadverse impacts on Russian oil and gas industry, with significant increases in exports to China and India. TheComprehensive Strategic Partnership with China has helped secure a substantial market for Russian crude oil and increased China's energy security. This study enhances understanding of trade deflection mechanisms and provides a framework for analyzing theinterplay between international trade, geopolitical strategies, and economic resilience. Geopolitical alliances and trade partnerships have ensured resilience and continuity in global trade. This shift indicates strategic diversification towards Asian markets and increased Central Asian involvement. BRICS engagement has provided Russia with a platform to advocate for energy security and challenge Western dominance in global energy governance. Future research should explore other supply-chain components and analyze trade within theBRICS+ group and Russia–China bilateral trade.

Suggested Citation

  • Maribel Aponte-Garcia, 2024. "Hydrocarbon trade deflection and supply‑chain trade restructuring under sanctions imposed during theRussia–Ukraine conflict," Russian Journal of Economics, ARPHA Platform, vol. 10(3), pages 299-318, October.
    • Handle: RePEc:arh:jrujec:v:10:y:2024:i:3:p:299-318
    DOI: 10.32609/j.ruje.10.125317
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    More about this item

    Keywords

    trade deflection sanctions Russia–Ukraine conflict oil and gas supply chains;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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