Crippling heatwaves lead to increasing reliance on fuel supplies from Russia

The extreme heat that has been scorching Asia in recent weeks has produced one clear beneficiary – Russia.

As countries across the region scramble to make sure they have enough coal, gas and fuel oil to keep the lights on, Russian energy being shunned by the West is looking increasingly attractive.

What began as a push from the Kremlin to fund its invasion of Ukraine has now turned into a pull from Asian economies anxious about making sure their power generators are supplied with enough fuel in what could be the hottest year on record.

“The worst place to be right now amid these searing temperatures is South Asia, especially poorer nations like Pakistan or Bangladesh,” said John Driscoll, director of JTD Energy Services Pte in Singapore.

“When you can’t even take care of your people’s basic needs, it’s very hard to care too much about international affairs.”

Russian exports to Asia of thermal coal and natural gas, the two fuels most often used for electricity generation, have grown markedly this year, figures from data intelligence firm Kpler show.

Coal volumes jumped sharply to 7.46 million tons in April, about a third higher than a year earlier. Shipments of liquefied natural gas to Asia have also been growing.

Meanwhile, Asian imports of Russian fuel oil, a dirtier and cheaper alternative for power generation, had the two highest months on record in March and April, according to Kpler.

The impetus for the region to buy more Russian energy is likely to increase due to an emerging El Nino weather pattern, which has already sent the mercury soaring. Vietnam’s prime minister has warned of power shortages this month, while Myanmar is struggling with worsening blackouts.

China and India – the most enthusiastic buyers of discounted Russian oil – are also purchasing the most coal, gas and fuel oil. They took more than two-thirds of Russian coal sent to Asia last month, according to Bloomberg calculations based on Kpler data. South Korea scooped up 15 per cent of the shipments, while Vietnam, Malaysia and Sri Lanka were also significant buyers.

Even Japan, a close ally of the United States and therefore reluctant to increase imports from Russia, might buy more, according to Chris Wilkinson, senior analyst for renewables at Rystad.

For Driscoll, the increasing purchases of Russian energy by many Asian countries highlights both the White House’s declining clout and the perilous situation many nations find themselves in.

“[They] are asking themselves: would I rather risk falling afoul of the US or forgo steep discounts on energy?” he said. “When there’s a good deal on the table, how can poorer nations afford to say no?”