Asian Energy Markets Following the Russian Invasion of Ukraine

Asian Energy Markets Following the Russian Invasion of Ukraine

Russia’s invasion of Ukraine continues to strongly impact international energy markets, posing severe challenges for energy importing countries. Much of the commentary and analysis has been focused on the consequences for, and reactions of, European nations and the European Union. Despite the fact that each region has its own specific dynamics, the global nature of energy markets means that the effects of the conflict in Ukraine are felt around the world, and Asia is no exception.

Most countries in Asia are net importers of fossil energy, either for all forms of fossil fuel or for at least one form. International prices of crude oil and LNG were already rising in the later months of 2021, but the war in Ukraine accentuated this rise. Russia has been changing its supply patterns and looking for alternative markets for its oil, gas, and coal exports in reaction to sanctions and bans, some of which have been driven by the private sector (often referred to as self-sanctioning). While Asian buyers have been picking up discounted cargoes of oil and coal, there have been new costs and complications as energy, food, and other supply chain flows are adapting to sanctions.

The response of the governments of energy-importing Asian nations has varied depending on geography, politics, and energy import needs. China and India are buying more discounted crude oil from Russia, with the potential to purchase more LNG being contingent on pricing and the physical ability to redirect flows. Meanwhile, Japan is following Europe by seeking to reduce its gas dependence on Russia, even though its plans will materialize only in the longer term. More generally, security of supply has risen in importance in the agenda of most Asian countries. Energy saving, fuel switching, and renewable energy are favoured actions. Nuclear power may also look more attractive, as is the case in Japan. But for some countries, the availability of competitively-priced alternative fuels is limited – given rising energy costs across the board – just as lead times for new renewables infrastructure is lengthy.

The immediate impact of these high energy prices and supply chain disruptions is seen in rising costs across many sectors – whose supply chains were barely recovering from the COVID-19 pandemic. The disruption of grain supplies from Ukraine and Russia has had particularly severe consequences for food prices, posing serious challenges for governments and peoples. Not only could this distract from the need to address climate change, but the growing frequency of extreme weather events may accentuate existing poverty and inequality.

These phenomena provide the context within which this commentary examines the impacts of Russia’s invasion of Ukraine on Asian energy markets, focusing on the direct exposure of Asian countries to Russian energy exports, as well as on the direct and indirect impacts of the short-term price increases. This paper discusses the implications for, and responses of, India and China in greater depth and refers to select other Asian countries depending on their exposure to energy markets, impact on global markets, as well as the availability of data.

This paper is published by the China Energy Programme of the Oxford Institute for Energy Studies at Asian-Energy-Markets-Following-the-Russian-Invasion-of-Ukraine.pdf (

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