Records published by the Kommersant business daily show that Russia’s coal exports have increased by nearly 20% in the first quarter of 2023. The publication reported that exports of all types of Russian coal from January to April had gone up by 18% following an uptick in coal exports in March.
Russia exported 69.9 million tons of coal over the sea in Q1 2023, with shipments through the usually profitable ports in the south and Far East decreasing due to competition from other kinds of cargo.
The Kremlin has been subject to extensive sanctions since early 2022 from most Western countries in response to its unprovoked invasion of Ukraine. Key Russian exports including coal, oil and fertilizers, have been sanctioned by numerous countries, and Russia itself cut natural gas exports to the rest of Europe in retaliation for the sanctions.
However, Russia has been able to keep its export numbers up by selling cheaply to countries that haven’t taken part in sanctions against the Kremlin, such as China and India. The recently released data shows that despite the sanctions Russia has faced regarding coal exports, it is still finding ways to get millions of tons of coal to its trading partners via the sea.
Kommersant said that Russia increased coal exports through the sea after it redirected its exports to Asia in the wake of European countries stopping purchases of the Kremlin’s energy. The European Union, one of the largest consumers of Russian coal exports, placed an embargo on the country’s coal last August.
Since 2022, the publication reports, Russia has redirected a whopping 140 million tons of coal to Asia through sea routes.
A report from Bloomberg stated that Asia’s increasing reliance on Russian coal was due to sweltering heat levels that have forced Asian countries to spend more on air conditioning and lighting. With 2023 predicted to be the hottest year on record in terms of global warming, Asian countries will most likely stick to relatively cheap Russian energy for the foreseeable future.
Kommersant noted that competition from railway and other cargo was placing pressure on seaborne shipments, stating that exporting coal often presents miners with plenty of financial difficulties. The publication said that Russian Railways would have to take steps to increase its railway capacity toward both the east and south to ease the pressure on sea shipments.
This additional capacity would be extremely beneficial as Russia will likely have trouble maintaining coal shipments via the sea due to the increasing expenses and costs compared to rail.
The reality that Russia is still exporting coal despite the international sanctions against it just goes to show how much demand still exists for this source of energy. It also explains why coal extraction enterprises such as Arch Resources Inc. (NYSE: ARCH) still have a role to play in helping different countries meet their energy needs even if coal has fallen out of favor due to its massive greenhouse gas emissions.
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