Russia is ‘blatantly violating’ its agreements with the OPEC oil cartel by hiding the true amount of oil it produces and sells, according to a new report that claims profits are funding Moscow’s war against Ukraine .
The investigation by Ukraine’s Center for Defense Reforms claims Russia is violating an OPEC deal to cut oil production. The think tank is chaired by Oleksandr Danylyuk, former chief adviser to Ukraine’s defense minister.
Oil Cup
“In 2016, amid falling oil prices and to stabilize the market, OPEC reached an agreement with ten other oil-producing countries, including Russia. Participants in this expanded format, known as OPEC+, agreed to reduce oil production, leading to a natural rise in global commodity prices,” the report said.
However, the authors claim that Russia has “blatantly violated its obligations under the OPEC+ agreement” by concealing the true scale of its production and sales, thereby exceeding its production quota “by no less than 2 .57 million barrels per day (28%) on average. during the first four months of 2024.”
60 billion dollars
This enriched the Kremlin, said Danylyuk, co-author of the report.
“That’s about $60 billion a year. And it’s also important because it’s money that no one sees,” Danylyuk told VOA. “And obviously, these are additional funds that Russia can use to support the war efforts in Ukraine. This is actually money they can use to buy microelectronics, explosives, shells, and to pay countries like North Korea and Iran.
The report claims that Russia is hiding the true volume of oil sold to its two biggest customers, India and China.
“To conceal these deliveries, Russian authorities indicate the zero value of certain contracts in customs declarations,” the report said. “In the first four months of 2024, Russia exported at least 789,000 barrels of oil per day to China, more than officially reported. During the same period, exports to India exceeded official statistics by at least 280,000 barrels per day.
Shadow Fleet
In addition, Moscow uses a so-called ghost fleet of tankers to mask the true scale of its oil sales.
Vessels “frequently change flags or ownership structures, deliberately disable the automatic identification system, falsify their location under the influence of electronic warfare, and use other deceptive navigation practices.”
Comparing discrepancies in transportation data, the Center for Defense Reforms estimates that Russia exports an unaccounted volume of crude oil of approximately 1.5 million barrels per day above its OPEC quota through the Baltic Sea and the Black Sea.
Smuggling
“Paradoxically, because Russia has begun using these sophisticated methods to smuggle its oil, it is able not only to deceive the West and hide its oil supplies from sanctions, but also to hide them from its partners of the OPEC+ club,” Danylyuk said.
“The true scale of the operations is actually much higher than most observers think: $60 billion literally stolen from other OPEC+ countries,” he added. “I don’t think OPEC was originally founded to have such members, was it? So it’s not fair. That’s not how cartels usually work.”
Russia’s response
Russia has not directly responded to accusations that it is hiding oil sales to OPEC. The Kremlin had not responded to VOA’s requests for comment at the time of publication.
Speaking at the Russian Energy Week forum in Moscow in September, President Vladimir Putin insisted his country was a reliable partner.
“Russia fulfills its obligations to supply energy resources to the world market and plays a stabilizing role in it by participating in authoritative formats like OPEC+,” Putin said in a September 26 speech at the conference.
OPEC also did not respond to VOA’s requests for comment. In a press release issued on Sunday, OPEC said Russia – along with Iraq and Kazakhstan – had “firmly reaffirmed” their commitment to reducing oil production.
Danylyuk said the interests of the West and OPEC were now aligned, “because the West doesn’t want Russia to make money and OPEC doesn’t want Russia to steal money from them.” money.”
“Obviously the only way to reduce Russia’s ability to make this money is to simply kick it out of OPEC,” he told VOA.
