In July, the business activity of Russian industrial companies dropped at the fastest rate in over two years – the PMI index from S&P Global fell to 47 from 47.5 in June. Despite significant military orders, industrial production has slowed for several quarters. It is also reported that in recent months UAE banks have started closing accounts held by Russian companies, which number over 4,000 in the country, and have increased scrutiny over compliance with sanctions.
Additionally, Kazakhstan and Turkey are exploring options to export Kazakh oil, bypassing Russia through the Baku-Tbilisi-Ceyhan (BTC) pipeline. Moreover, the Indian government, one of the largest buyers of Russian oil, has reportedly asked state-owned refineries to evaluate alternative sources of supply in the event that oil imports from Russia cease. India’s four state-owned refineries, which handle 60% of the country’s total refining capacity, have not placed any new orders for Russian crude in a week.
Although Indian officials currently deny changing their Russian oil purchasing policy, but US President Donald Trump claims that India will stop purchasing Russian raw materials in order to strike a trade deal with the US. Lending support to this, India’s largest state-owned oil company, Indian Oil, has reportedly purchased five million barrels of oil from the US and two million barrels from the UAE amid increasing pressure from Washington.