Report: Russia hiding oil sales from OPEC to fund war in Ukraine

Ukrainian researchers allege Russia’s systematic deception of OPEC, with hidden oil sales exceeding quotas, reportedly generating $60 billion annually.

Nov 6, 2024 - 02:00

Report: Russia hiding oil sales from OPEC to fund war in Ukraine

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Russia is “flagrantly violating” its agreements with OPEC by concealing its true oil production and sales volumes, generating billions in hidden revenue to fund its war in Ukraine, Voice of America reports.

Following its full-scale invasion of Ukraine in February 2022, Western countries imposed sanctions on Russian oil – introducing price caps, import bans, and restrictions on maritime insurance and shipping. However, Russia has evaded these measures by leveraging a clandestine “shadow fleet” to covertly transport oil and goods, sustaining revenue for its war effort.

A new report from the Ukrainian Centre for Defence Reforms says Moscow exceeded its production quota by at least 2.5 million barrels per day in the first four months of the year. This is despite agreements with OPEC+ members to cut production for price stabilization, VoA reports.

“It’s about 60 billion US dollars per year. And it’s also important because 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,” report co-author Oleksandr Danyliuk told Voice of America.

The report alleges Russia conceals oil volumes sold to India and China by listing zero values for some supply contracts on customs declaration forms.

“So it’s just two countries, like the biggest consumers, but still only two countries, [we] found that it was like about 1 million barrels per day, which were actually hidden in that way,” Danyliuk said.

Additionally, Voice of America reports that Moscow employs a shadow fleet of tankers to mask its oil sales scale, enabling shipments of an extra 1.5 million barrels daily above its quota. Danyliuk suggests the actual figures could be higher.

While Russia has not addressed these specific accusations, Russian President Vladimir Putin defended his country’s position at a September energy forum, saying:

“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 claimed.

OPEC did not respond to Voice of America’s requests for comment. In a 3 November press release, OPEC stated that Russia, along with Iraq and Kazakhstan, had strongly reaffirmed their commitment to cut oil output and compensate other members for any overproduction.

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