Crisis-hit Sri Lanka — which ran out of fuel earlier this year — snaps up cheap Russian oil for the first time ever

The country went into default for the first time in May due to an economic downturn, and has been buying discounted Russian oil ever since.

The Asian country has been buying a lot of Russian oil in the last few months. Russia was the sole supplier in the last few months. Both firms make their own vessel- tracking data.

Three months ago, Sri Lanka said it would send an official delegation to Russia to negotiate oil deals. The prime minister declared the country bankrupt.

As gas stations run out of supply, they are looking to hedge against rapid price gains for fuel.

Neil Crosby, a senior analyst at OilX, told Insider that the combination of financial stress due to the current economic climate and very strong dollar makes these countries most likely to seek to take advantage of cheaper Russian barrels.

According to Kpler's lead crude analyst, it's unlikely that Sri Lanka ever bought Russian crude. The firm's records show no imports prior to the start of the year.

In May and August, Russian cargos made up all of the country's crude imports, while in September they made up more than half of the country's imports.

The analysts said that Sri Lanka's appetite for Russian oil is price driven. The discount on flagship Urals crude has been as wide as $30 at times, but it recently traded at a $17 discount.

In comparison to India, Sri Lanka only can process 50,000 barrels of oil a day.

It is not the only one. Analysts told Insider that southeast Asia will be a hot spot for Russian crude.

The dollar is the official currency for global trade in commodities. The dollar's strength makes imports expensive for countries with weak currencies.

Even if Europe's market share is not replaced entirely, the purchases of Russian crude by crisis-hit countries could provide a steady market for the Kremlin.

Energy is a key pillar of the Russian economy, accounting for one-fifth of its GDP. The US and the European Union have both banned Russian oil.

In September, Russian seaborne oil exports plummeted to their lowest level in a year.

The impact of lower energy sales to the European Union has been mitigated by President Putin.

Russia said in April that it was ready to sell oil in any price range.