After the war in Ukraine began, Europe started imposing sanctions on Russia. One sanction followed another in an attempt to pressure Russia, eventually leading to sanctions on trading Russian energy. This meant saying goodbye to cheap energy from Russia. Part of the sanctions was enacted to “punish” Russia—an invading country should feel the consequences. (We probably shouldn't talk about the situation in Israel, Palestine, or Lebanon right now; that’s “completely, completely different.”)

Before the war in Ukraine, Russia accounted for about 27% of the EU’s oil imports, with natural gas and coal contributing similarly. However, the EU's sanctions and trade stoppages have drastically reduced Russia’s share of oil in Europe to around 2-3% of the EU’s total oil imports.

One could argue that the sanctions are working. The EU has taken significant steps to reduce its dependence on Russian oil. But digging a little deeper into the numbers, the picture starts to look more complex—and perhaps hypocritical.

India’s Role in the New Energy Supply

Before the Ukraine war, the EU also imported oil from India, but in much smaller quantities—about 0.2 million barrels per day. In comparison, the EU imported 2.4 million barrels of oil per day from Russia at that time.

Today, the EU still imports some oil directly from Russia, but the amount has fallen to 0.2 million barrels per day. Conversely, the EU’s oil imports from India have significantly increased—to 1.2 million barrels per day. This increase is quite striking.

What’s the explanation? It turns out that India is now among the largest importers of Russian oil. The oil India buys cheaply from Russia is refined and resold to markets like the EU. In other words, Russian oil is still making its way to Europe—just through a new and convoluted trade route via India.

Danish Companies’ Losses and the Consequences of Sanctions

The sanctions against Russia, however, had consequences that went beyond energy imports. Many Danish companies with investments in Russia were hard hit, as they were forced to withdraw from the country or wind down their operations.

Some examples:

• Carlsberg had significant investments and market shares in Russia but had to pull out and potentially incur large financial losses.

• LEGO halted its distribution to Russia and terminated its agreements with local retailers, resulting in lost sales in an otherwise large market.

• A.P. Møller - Maersk stopped its transport to and from Russia, thus losing income from freight contracts and logistics operations in the region.

• Grundfos and Vestas also had to wind down or suspend their activities in Russia, affecting their growth and earnings. 

What to say?

When looking at Europe’s energy imports after the war, one can question how consistent the sanctions truly are. On paper, the EU is nearly independent of Russian oil, but in reality, some of the Russian oil has merely been redirected through India.

At the same time, the sanctions have had real costs for European companies, particularly Danish firms, which lost significant market shares and had to restructure their business strategies.

Hypocrisy? Perhaps. One thing is certain: the war has changed the energy market and Europe’s relationship with both Russia and its own principles—and the consequences will be felt for a long time to come.