this wild Russian invasion of Ukraine He launched the West’s largest sanctions package. Russia Since the end of the Cold War, it’s a strategy aimed at inflicting a prohibitive cost on the war machine to force the Kremlin to withdraw its troops from the neighboring country or at least sit at the table for negotiation. The Russian economy is striking. The International Monetary Fund (IMF) forecast in April that its gross domestic product (GDP) will fall by 8.5% this year; this is a bigger contraction than the financial crisis (2008) or the traumatic ruble crisis (1998). ). It’s a costly expense, but they’re far from checkmate because main source of funding not damaged. Income from sales gas, oil and coal increased During the first 100 days of war, according to a study published this week.
Since the beginning of the conflict, the Russian coffers entered more and more. 93,000 million euros to its exports fossil fuelsAccording to an analysis by the Helsinki-based Center for Energy and Clean Air Research (CREA). An unprecedented number. “A lot of money. We estimate their revenue to have increased by 50% compared to the same period last year due to the lack of market supply and high energy prices. unprecedented record“, assuring this paper Lauri Myllivyrta, principal analyst at CREA. This means that for the sale of hydrocarbons alone—oil continues to be the most lucrative— Russia earns more than the cost of war every day. According to the Finnish organization, 930 million euros, compared to the 840 million euros spent every day for the occupation.
this European Union this was the main customer of Moscow for 100 daysrealizes 61% of energy exports. But even though it doesn’t impose sanctions on Russian gas and its veto on oil imports by sea doesn’t take full effect until December, it’s putting an increasing burden on it. Since the beginning of the invasion, it has reduced its gas purchases by 23% and crude oil purchases by 18%. Adding to these volumes the cuts imposed by the US, Turkey or Egypt, Russia’s exports fell by 15 percent for the first time in May, compared to the start of the conflict.
Exports fall, income rises
But what doesn’t serve is the loss of revenues, which accounted for 45% of Russia’s federal budget last year. And this is despite Moscow trying weather the storm by selling gas and oil at discounted prices, still 60% higher than a year ago. Russia’s application of high discounts on crude oil, such as 30% on average, has allowed it to gain market share in countries such as India, China and even France, which has increased its imports of liquefied natural gas and oil. Explains Myllivyrta. . In the case of France, that dynamic needs to change from December, when more than two-thirds of Europe’s embargo on sea-bound crude oil came into effect.
The measures adopted by the West mean that China has overtaken Germany as the main customer of Russian hydrocarbons. India is the country that increased its imports the most. Take advantage of Kremlin discounts. France, Saudi Arabia and the United Arab Emirates also increased their purchases.
Penalties in the room
Europe still has a few cartridges left to damage the revenue Russia used to finance its war. Gas sanctions are one of them. the other passes Sanctions from Kremlin on companies carrying fossil fuels, each time they will have to travel further to reach their destination. Between April and May, 68% of its oil traveled on European and British ships. “This is one of its weak points,” the CREA report says. Strong sanctions on tankers carrying Russian crude would significantly limit their ability to divert their exports to other parts of the world.