Russia to make nearly $321 bln from energy exports in 2022
3 Min Read
The Western sanctions on Russia are proving futile, and Moscow is still making a profit despite the embargo.
-
Russia to make nearly $321 bln from energy exports in 2022
The Western sanctions on Moscow are faltering, with Russia expected to emerge from the war better than before, proving the sanctions futile and reiterating the words of European officials that the sanctions were affecting their countries more than they were affecting their main target.
Bloomberg reported Monday that its economic experts expected Russia to earn some $321 billion from energy exports in 2022, which constitutes an increase of more than 33% from 2021. Russia is on its way to holding a world record for surplus that the Institute of International Finance says could exceed $240 billion.
As pressures mount, many Russian customers are looking for alternatives to try and evade sanctions from the United States and various EU countries, and Moscow is retaliating by giving discounts to its allies and "friendly countries".
The EU itself is trying to cut ties with the Russian energy industry, as Germany and many of its allies are shifting their energy policies to be less reliant on Russia even if it costs them a fortune. However, despite condemning Moscow's actions in Ukraine, Germany has been transparent about its opposition to sanctions or political pressure that would spawn a full energy embargo, with only a few countries banning energy imports from Russia, like the United States and the United Kingdom.
All in all, despite the sanctions and overall damage inflicted on the global energy sector, Russian oil will make an additional $103 billion in budget revenue for the nation.
Although the Ukraine crisis has affected energy shipments, the effects on imports and domestic demand will give a surge to the current account, pushing it past last year's record of $120, Bloomberg said.
Goldman Sachs Group Inc., put the upward revision for the current-account surplus this year at $205 billion, and it said it would be enough for the Bank of Russia to meet the private sector's demand for foreign exchange and allow it to loosen capital control.
Russia had launched a special military operation in Ukraine due to NATO's eastward expansion, in addition to the Ukrainian shelling of Donbass, the killing of the people of the Donetsk People's Republic and the Lugansk People's Republic, as well as Moscow wanting to "denazify" and demilitarize Ukraine.
In response, the US and its allies have rolled out comprehensive sanctions, including restrictions on the Russian central bank, export control measures, SWIFT cutoff for select banks, and closure of airspace to all Russian flights. Many of their companies have suspended their Russian operations.
However, the status-quo and the US sanctions on Russia have weakened US citizens' purchasing power, causing fuel prices to soar in the country with US oil prices reaching their all-time high following a ban on Russian fuel exports.
