By: Business Unusual Writer
According to a report, Russia earned about $100 billion (£82.3 billion) from oil and gas exports during the first 100 days of the Ukrainian conflict. According to the independent Centre for Research on Energy and Clean Air (CREA), revenues have been declining since March as many countries boycott Russian supply, although they are still substantial.
It also cautioned about potential loopholes in measures to limit Russian imports. The EU, the United States, and the United Kingdom are among those who have vowed to reduce Russian imports.
However, according to the CREA analysis, Russia made $97 billion from fossil fuel exports in the first 100 days of the Ukraine conflict, from February 24 to June 3. The European Union accounted for 61 percent of total imports, valued $59 billion. Overall, Russian oil and gas exports are declining, and Moscow's earnings from energy sales has fallen from a high of well over $1 billion per day in March.
However, during the first 100 days of the Ukraine war, earnings outpaced the cost of the conflict, with the CREA estimating that Russia is spending roughly $876 million per day on the invasion.
By the end of 2022, the EU intends to prohibit Russian oil shipments by sea, reducing imports by two-thirds. In March, the union agreed to reduce Russian gas imports by two-thirds within a year. However, it has so far been unable to reach an agreement on an absolute prohibition. Meanwhile, the United States has imposed a total ban on Russian oil, gas, and coal imports. Russian oil imports will be phased out by the end of the year in the United Kingdom. The EU's planned oil embargo, according to the CREA research, would have a severe impact.
It noted, however, that huge amounts of Russian crude oil are now being exported to India, which has raised its share of Russia's overall crude exports from roughly 1% before the invasion of Ukraine to 18% in May. According to the report, a "substantial share" of this was refined and sold - typically to consumers in the United States and Europe - and that this was "an essential loophole to plug."
It went on to say that tough sanctions against tankers transporting Russian fuel will severely curtail the activity. According to the research, as Russia seeks new markets for its oil, much of it is transported by ship, with the bulk of the vessels controlled by European and American corporations. France, China, the United Arab Emirates, and Saudi Arabia were among the countries that raised their purchases of Russian petroleum, according to the research.
On the surface, this report appears to be full of terrible news. The war in Ukraine is still being funded by energy sales, with high prices counteracting efforts to lower demand.
But that doesn't rule out the possibility of pressure on Moscow in the end. The authors of the paper estimate that a partial EU embargo on Russian oil would reduce revenues by $36 billion per year. Gas exports have already dropped considerably, and measures are in the works to further reduce Europe's dependency on Russia.
However, embargoes must be effective. According to the study, Russia is increasingly exporting oil to India for processing. Some of those refined goods are already making their way back to European markets. This is a clear potential loophole because refined products are not covered by the EU ban.
And, as Russian oil is diverted from pipelines and onto ships in search of new markets, the demand for ships to transport it is expanding. However, European businesses possess the vast bulk of the oil tankers now in use. Issues like these must be addressed if pressure on Russia is to be successful.