According to Dan Yergin, Asia will soon become the primary destination for Russian oil.

• According to Dan Yergin, vice chairman of S&P Global, it seems that Asia will be the primary destination for barrels of Russian oil that would have typically been shipped to Europe.
• Moscow has been economically punished by the West for the invasion, with the U.S. banning Russian crude, the U.K. planning to do the same, and the European Union considering similar measures.
• Yergin stated that Russia was once an energy superpower, but its status as such has been reduced, although it will still play an important role in the energy sector.

S&P Global's Dan Yergin stated that Asia will be the primary market for Russian oil as the country seeks to sell its energy exports.

Oil importers in Asia, such as China and India, have been affected by rising oil prices due to Russia's invasion of Ukraine in February. Despite the allure of cheaper Russian oil, both Beijing and New Delhi maintain close relationships with Moscow.

On Monday, CNBC's "Street Signs Asia" reported that according to Yergin, it seems likely that Asia will be the primary destination for barrels of Russian oil that would have typically been sent to Europe.

Moscow has been economically punished by the West for the invasion, with the U.S. banning Russian crude, the U.K. planning to do the same, and the European Union considering similar measures.

Russian oil is not being picked up, letters of credit are not being provided, shippers are not showing up, and some ports are not receiving Russian oil due to self-sanctioning.

The OPEC+ alliance, of which Russia is a part, is the world's largest exporter of oil to global markets and the second largest crude oil exporter after Saudi Arabia, according to the International Energy Agency. However, Russia has excess crude that is difficult to sell, and this situation is likely to worsen, analysts said.

Yergin stated that Russia was once an energy superpower, but its status as such has been reduced, although it will still play an important role in the energy sector.

The IEA reported that Russian crude is currently being sold at unprecedented discounts. Analysts stated that two commodity trading firms recently offered discounts of $30 and $25 per barrel for the Urals blend.

Since the war began, oil prices have been volatile and are currently around 80% higher than they were a year ago. In contrast, prices for other countries' energy exports have remained stable.

India’s appetite for Russian oil

Historically, India sources its crude from countries such as Iraq, Saudi Arabia, the United Arab Emirates, and Nigeria. However, these countries are currently imposing higher prices due to the increase in oil prices.

Since the Russia-Ukraine war began in early March, there has been a substantial increase in Russian oil deliveries bound for India, and it appears that New Delhi will continue to purchase more affordable oil from Moscow.

The Indian economy is significantly impacted when oil prices rise, as 85% of India's oil is imported.

According to Yergin, India is in discussions with Russia about purchasing oil at a substantial discount, but the process is intricate due to the complex logistical system that manages the global movement of 100 million barrels of oil daily, making it challenging to make any changes smoothly.

The update to this story reflects that Dan Yergin is now the vice chairman of S&P Global.