Western sanctions intended to throttle Moscow’s revenue from oil and gas have instead seen Russian fossil fuel exports surge to near-record quantities and prices.
Virtue signaling isn’t much of a geopolitical strategy.
Russia earned an estimated €93 billion ($97 billion) in the first 100 days of its war on Ukraine, according to a study released Sunday by Center for Research on Energy and Clean Air in Helsinki.
Lauri Myllyvirta, an analyst who led the research, told The New York Times that not only has Russia benefitted from record-high oil and gas prices, but “export volumes are close to their highest levels on record,” too.
- While the European Union has reduced imports of Russian crude oil and natural gas, by 18% and 23% respectively, purchases by Europe still made up 61% of Russia’s oil and gas revenue during the first 100 days of the Ukraine war.
- Thanks to the United Arab Emirates and especially India, which alone bought 18% of Russia’s crude oil exports over the 100-day period, crude oil export volumes remained unchanged from when the sanctions began.
The United States’ total ban on Russian fossil fuel imports has had some effect on earnings, but Russian oil has apparently continued to leak into America via a loophole.
- Imports from countries like the Netherlands and India likely contain Russian crude oil, per the Times’ Hiroko Tabuchi.
- “Though Russia’s fossil fuel exports have started to fall somewhat by volume, as more countries and companies shun trading with Moscow, surging prices have more than canceled out the effects of that decline,” Tabuchi also reported.
WHAT THEY’RE SAYING
Behind closed doors, Biden administration officials have acknowledged sanctions on Russia are hurting Americans more than was anticipated, Bloomberg reported Tuesday, citing people familiar with internal discussions.
- Some “officials are now privately expressing concern that rather than dissuading the Kremlin as intended, the penalties are instead exacerbating inflation, worsening food insecurity and punishing ordinary Russians more than Putin or his allies,” according to the report.
- The White House’s expectation that the sanctions’ “impact on inflation at home would be minimal” has proven to be a miscalculation, with U.S. inflation rates spiking to record-highs over the past few months.
- The administration has recently started encouraging U.S. companies in key industries to deal with Russia.
Facing a 24% drop in Russian fertilizer exports amid a global food crisis, the Biden administration has quietly begun to push companies to buy and carry more Russian fertilizer, Bloomberg reported Monday.