Oil and gas boom fills Russia’s coffers: Is the Russian economy profiting from war?

Are the sanctions that bring the Russian economy to its knees ineffective? During the six-month war in Ukraine, Russia has collected 158 billion euros by exporting expensive fossil fuels.

The country’s economy has not collapsed, and we live normally in Moscow. However, the entire Russian manufacturing system has been weakened by Western sanctions. They take time to produce their effects, but the months and years promise to be difficult for Russian industry.

Revenue will increase

Finnish Research Centre, Kria, it is estimated that Russia sold 158 billion euros of fossil fuels, oil, gas and coal, in six months. Exported volumes have fallen, but the explosion in prices has largely compensated for this decline: current revenues are higher than in previous years.

The leading energy importer during this period was the European Union, followed by China and Turkey. These European imports helped “Financing War Crimes in Ukraine”Kriya comments.

Progressive oil embargo

However, the EU has put an end to its coal purchases. A partial embargo on Russian oil will gradually come into effect by the end of the year. Gas, on the other hand, has not been directly targeted by sanctions, but the EU has set itself the goal of reducing its consumption and dependence on Russian gas in particular. Moscow accelerated the move by unilaterally cutting its supplies to European countries.

So Russia is drastically reducing sales of hydrocarbons to its first customer. It has tried with some success in finding new outlets for oil, mainly in China or India. But new customers take advantage of the situation and buy this oil at a discount. Hydrocarbon revenues are expected to decline in the future.

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In addition, the G7 countries want to put in place A cap on Russian oil prices, to prevent the Kremlin from taking advantage of the windfall of rising prices. It may take months to deploy this unprecedented mechanism.

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