Russia earns $98 billion from fuel exports in 100 days of Ukraine war
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Are sanctions really working when Russian oil revenue is only increasing?
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Oil refinery against a sunset (Getty Images)
During the first one hundred days of the war in Ukraine, Russia racked up $98 billion in fossil fuel exports, with most of them sent to the European Union, according to a Finland-based research facility report on Monday.
A Finland-based facility called the Centre for Research on Energy and Clean Air (CREA) released the report at a time when Ukraine has been urging the West to sever all trade ties with Russia to cut off the country's financial lifeline.
Read more: The US wants to take apart the Russian economy: Treasury
Earlier this month, the European Union agreed to put an end to all Russian oil imports, keeping in mind that Europe is heavily dependent on Russian energy.
According to the report, the EU took 61% of total Russian fossil fuel exports, which amounts to $60 billion. The top importers were China, at 12.6 billion euros, Germany, at 12.1 billion euros, and Italy at 7.8 billion euros.
The revenues come mostly from crude oil sales, which amount to 46 billion euros. Next are pipeline gas, oil products, and liquefied natural gas and coal.
Although Russia's exports plummeted in May, the global rise in fossil fuel prices continued to fill the Kremlin's coffers, with export revenues reaching record highs.
All in all, the average export prices are 60% higher than last year, according to CREA.
China, India, the UAE, and France have increased purchases from Russia, according to the report.
“As the EU is considering stricter sanctions against Russia, France has increased its imports to become the largest buyer of LNG in the world,” said CREA analyst Lauri Myllyvirta.
"Since most of these are spot purchases rather than long-term contracts, France is consciously deciding to use Russian energy in the wake of Moscow’s invasion of Ukraine," Myllyvirta added, calling on an embargo on Russian fossil fuels so actions "align with words."
Read more: Putin - Europe's oil sanctions are 'economic suicide'
Russian official: Russia may benefit from EU oil sanctions
Russia's lower house chairman Vyacheslav Volodin said that Russia's economy may benefit from the EU oil embargo, which was recently imposed wholly on Russian oil as part of the 6th European package of sanctions. In return, EU members will be paying $268 billion per year for rising energy prices, throwing the old continent into a crisis.
"Russia's possible losses caused by a ban on oil exports to Europe, according to experts, could amount to $22 billion a year. But due to surging energy prices, prompted by the sanctions and redirection of Russian oil markets to Asia, the costs can be fully compensated, with a possible profit for our economy," Volodin said on Telegram.
Read more: Russia doubles fossil fuel revenues since Ukraine war
He revealed that Europe will be paying over €250 billion ($268 billion) per year, other than the additional costs of enterprises' transition to new oil brands.
"Washington is doing everything so that the main burden from the implementation of sanctions falls on European countries. It is deliberately weakening the EU economies to make them even more dependent on the US, seeking to govern countries that previously strived for greater independence. Now these states can hardly even think about it," Volodin added.
