Faced with cuts in Russian oil purchases by European countries in retaliation for the invasion of Ukraine, Russian President Vladimir Putin has set out to find other markets. Increased domestic consumption and higher sales to Asiawill offset the drop in shipments to Europe, he said. Some of this has already been seen. Shipments from Western Russian ports to the Asian market went from being virtually non-existent before the invasion of Ukraine to 875,000 barrels per day in early April, says Julian Lee, oil strategist at Bloomberg First World, in one of his columns Julian Lee, oil strategist at Bloomberg First World. This volume is equivalent to Russia's combined daily exports to Germany, France, Greece, Italy, and the United Kingdom before the invasion.

The strategy seems to be working, but it has many drawbacks that limit it, Lee notes. Refineries are designed to process certain types of crude oil that cannot be easily substituted with other types of oil. Customers—India is one of the main buyers—are unwilling to risk their long-term relationships with their traditional suppliers, mainly in the Persian Gulf, which is also a limitation.

An additional factor is the pressure this strategy puts on the availability of tankers to transport oil. A tanker takes a week to travel between a western Russian port and a Dutch or German port. It takes a month to reach the west coast of India. According to Lee, diverting all Russian crude shipments from the Baltic countries to India would require five to six times more ships than those used on the original routes.

The way out is not easy for the Russian president.