LAUNDROMAT COUNTRIES

• Laundromat Countries are countries that buy Russian oil and sell processed products to European countries, thus sidestepping European Sanctions against Russian oil
• India leads five countries named as the “Laundromat” countries that buy Russian oil and sell processed products to European countries, thus sidestepping European sanctions against Russia, says a Helsinki-based group that cited the latest figures for the first quarter of 2023
• India, China, Turkey, the UAE and Singapore are identified as 'Laundromat' countries by Centre for Research on Energy and Clean Air (CREA) for European countries
• The five countries are responsible for 70 percent of Russia's crude oil exports, the study highlighted

• Report by international agency Bloomberg that showed how European Union (EU) countries, which are all part of the “price cap coalition” that bars trade and insurance for any oil purchased above a certain price from Russia, are in fact increasing their intake of oil from India, China, Turkey, the UAE and Singapore
• The report accused Indian sellers and European buyers of possibly “circumventing sanctions” by selling crude products from a refinery in Gujarat that is co-owned by Russian oil company Rosneft.

• Price cap coalition countries have increased imports of refined oil products from countries that have become the largest importers of Russian crude
• This is a major loophole that can undermine the impact of the sanctions on Russia
• European countries are simply substituting oil products they previously bought directly from Russia, with the same products now “whitewashed” in third countries and bought from them at a premium
• Of the so-called “laundromat” countries, India, which in April remained the highest global consumer of seaborne Russian crude for a fifth month, is ahead of all others in the export of crude products to the coalition countries, exporting nearly 3.8 million tonnes of oil products to price cap coalition countries, which include the EU, G-7 countries, Australia and Japan

• India’s exports of diesel, for example, tripled to about 1,60,000 barrels per day in March 2023, compared with the period before the Russian war in Ukraine, making diesel one of the largest components of India-EU trade at present
• The CREA report said the most oil products were being exported from two ports in Gujarat: the Sikka port that services the Reliance-owned Jamnagar refinery, and the Vadinar port that ships oil products from Nayara energies, which is partly owned (49.13%) by Rosneft, alleging that this could constitute “circumventing sanctions” imposed unilaterally by the U.S. and Europe
• From less than 1% of its total oil intake pre-February 2022, India imported about a third or 35% of its oil imports from Russia in March 2023, buying about 1.6 million barrels per day from Russia over the past year