Text | Wei Xiao is a lecturer at the School of Spanish Languages, Zhejiang University of Foreign Chinese, and an associate researcher at the Energy and Ecology Research Center of the Rim Mediterranean Research Institute
On March 18, Putin won the Russian election again, so far Putin has actually been in power for 24 years, and there is no suspense about his re-election, but the new policy after the re-election is worth studying. The new Putin government is facing many challenges, the Ukraine crisis continues, and the Western sanctions against Russia led by Europe and the United States continue to intensify, causing its original industrial system to suffer heavy losses and its supply chain is on the verge of breakdown. At present, Russia is committed to stabilizing people's livelihood and promoting the economy at home, revitalizing the two chains of production and supply, and continuing to support the war abroad to achieve victory.
In the current predicament, oil exports have become the main factor affecting the Russian economy, Russia has formulated a series of new energy policies, which can be summarized as "exporting, raising exports", that is, earning foreign exchange through the export of bulk oil and gas raw materials, and at the same time helping to reform the existing petrochemical industry with foreign exchange income, realizing export substitution to complete industrial upgrading, and finally bidding farewell to the low value-added raw material export model.
After the Ukraine crisis, the pattern of Russian crude oil exports has changed abruptly, and the trade direction has gradually shifted from "looking westward" to "turning eastward", with half of the east and west becoming 85% of eastward exports, but it is still trying to create a diversified oil and gas export pattern, and bidding farewell to a single partnership is still its main policy. Among them, the export value to Europe fell from 40% to 4%. India, China, and Turkey have become major export markets, with exports to India increasing by more than 13 times compared to pre-conflict levels. Russia-India crude oil trade has always been the main object of concern of the United States, and the United States has quite a few complaints about Russia-India oil trade. The Indian government has repeatedly stated that it aims to find the most preferential oil supplier in the international crude oil market, so as to ensure that it can purchase cheap crude oil for deep processing and re-export of the industrial chain. Although Russia has continued to make concessions, due to the intensification of sanctions, the Russian-Indian oil trade was interrupted in the middle of this year.
The Russian-Indian oil trade has exposed two problems: first, although Russia has been trying to improve the depth of oil processing, it has always been burdened by the internal and external environment, and the deep processing link has been controlled by its trading partners; second, India insists on settling the oil trade settlement in rupees and restricts Russia from converting the rupee into other currencies it needs, resulting in Russia being forced to hold a large number of rupees in the long-term Russian-Indian trade surplus.
Under the current situation, according to the analysis of the Putin government's oil policy, the new energy deal mainly focuses on two aspects.
Increase the depth of oil processing
Upgrading the refining process to reach the world's advanced level by 2025. At the beginning of the collapse of the Soviet Union, the processing depth of Russian crude oil was only 64%, and it has continued to rise in recent years. According to public information from Gazprom Neft, the average processing level of its main refineries has now increased to more than 90%, and Russia is gradually changing from an importer of polymers to an exporter. Using the ZapSibNeftekhim petrochemical complex as a model, at least four petrochemical complexes with an annual production capacity of not less than 2.5 million tons of polymers will be established.
In the field of natural gas, the technology and equipment used in the development of the oil tanker fleet and the Arctic region must be localized, and 100% made in Russia and developed in Russia. At the same time as the gradual export substitution of Russian oil and gas, import substitution in the manufacturing industry will be realized. Due to the oil embargo after the Ukraine crisis, the "shadow fleet" urgently formed at the behest of the government has achieved early results, increasing the premium capacity of Russian oil, ensuring the normal progress of its oil and gas trade, and inspiring its confidence in developing its own equipment and technology.
Establish a large-scale LNG production line to improve the capacity of natural gas purification and re-export. It is planned to build a large-scale natural gas liquefaction plant in the next 5~7 years to improve competitiveness. At the same time, we will improve the level of natural gas purification, especially the direct export of "lean" natural gas to the mainland after removing valuable chemical components, so as to achieve the purpose of increasing its own profits.
Establish a demand-based trade settlement system
In order to achieve the goal of supporting the war and maintaining the development of the domestic economy, energy exports have become an important focus for Russia. However, due to the sharp reduction in sanctions, Russia will continue to abide by the "OPEC+" production cut agreement in order to achieve the goal of selling at a high price to narrow the fiscal deficit.
Russia aims to diversify its oil trade pattern, but after its oil trade with India is blocked, Russia can only make concessions in the current situation, first stabilize the scale of oil exports and then seek change. As a result, the mainland will be the preferred target of Russia's largest oil partner.
RMB settlement of Russian oil trade will continue to deepen. At present, the main use of RMB in the settlement of Russian oil trade is tended, followed by the dirham. Although the mainland and India have a trade deficit with Russia, in the current sanctions environment, the mainland has a large trade volume, deep industrial ties with Western countries, and the renminbi has a strong ability to resist the second sanctions. Moreover, the mainland has a complete industrial chain, which can meet Russia's demand for various materials under sanctions, and the stored RMB can be exchanged for US dollars or directly trade with the mainland.
In the long run, during Putin's six-year new term, deepening export substitution is conducive to mobilizing Russia's potential comparative advantages on the basis of giving full play to its comparative advantages, helping Russia's industrial upgrading and maintaining its own oil and gas export competitiveness. In the short term, the RMB settlement of oil trade is in line with Russia's current urgent needs, but the mainland should assess the situation and grasp the initiative in bargaining, respond flexibly, and avoid secondary sanctions.
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Editor: Meng Ying
Proofreading: Liang Guohua
Review: Chang Fei Lu Xiangqian