Experts have warned Brazil, could join India and China in buying discounted oil from Russia, which could hand the Kremlin a major advantage in its plan to plunge Europe into a cold winter. Following Vladimir Putin’s invasion of Ukraine, Western powers including the UK, US and the EU hit Russia with crippling economic sanctions, while pledging to end their reliance on Russian oil and gas.
Europe’s heavy dependence on Moscow’s energy exports, combined with the soaring energy prices following the invasion meant that the bloc has been effectively fuelling Russia’s war machine by handing the country millions in revenue daily.
While the EU divests from Russian energy, the Kremlin has also been ending its reliance on Europe as a buyer, by looking for deals elsewhere.
After already increasing oil and gas trade with India and China, Brazil’s President Jair Bolsonaro is also reportedly prepared to sign a deal with Putin, that would boost Russian coffers at a time when profits from the EU are beginning to dry up.
Giovanni Staunovot, a commodities expert tweeted: “‘We are now negotiating with Putin the supply of cheaper diesel’, #Brazil president Jair Bolsonaro.”
Reports of the two countries being close to a deal have been floating around for months, as in July it was reported a deal with Moscow is close.
While Mr Bolsonaro provided no further details, a senior Economy Ministry official said: “It makes sense and eventually could happen.”
Meanwhile, a senior official from state-run oil company Petrobras, which is responsible for supplying most fuel to the domestic market, told Reuters that the idea was not surprising but raised concerns, without going into details.
So far, it is unclear whether Western sanctions on Russia would affect Brazil’s ability to buy Russian diesel, although it may not be impossible, given Russia’s increased trade with China and India.
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Brazil has disregarded Western sanctions, with Mr Bolsonaro having met Putin just a few days before the invasion of Ukraine.
Since then, the Brazilian leader has stated that his friendship with Putin has allowed the country to maintain access to fertilizers that are crucial for the country’s vast agribusiness sector.
This comes amidst reports showing that China has relished the cheap energy imports flooding in from Russia, getting 17 percent more Russian crude oil between April and July from the same period a year ago.
While Russian cash reserves have reportedly plunged following crippling sanctions and slashed gas deliveries to Europe, China appears to be stepping in to replace European buyers, providing a crucial lifeline for Vladimir Putin amid the Ukraine war.
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Xi Jinping and the Russian President are meeting this week in Uzbekistan for a summit as the pair continue to deepen ties amid Russia’s war in Ukraine, which has seen European nations attempt to scupper energy links with Russia after being dependent on its supplies for so long.
And while European nations and Western energy giants continue to pull out of Russia as the invasion rages on, the Chinese President has stepped in to purchase huge volumes of gas and other fuel sources that would have otherwise been sent to Europe.
Luckily for China, it has been purchasing Russian gas on the cheap as Russia can offset losses from the EU scaling back its purchases.
This year, the nation has purchased 17 percent more Russian crude between April and July than the same period a year ago.