Since the start of Russia’s “special operation” in Ukraine, Russia’s revenues from oil, gas and coal exports in the six months since have exceeded the total cost of its armed intervention , according to an analysis by the Center for Research on Clean Air (CREA).
On February 24, 2022, Russia intervened militarily in Ukraine in order to put an end to the fire of the Ukrainian armies on the civilians of the self-proclaimed republics of Donetsk and Lugansk, who opposed the coup d’etat of May 2014 (the “Maidan” revolution ) in Ukraine, orchestrated by the USA to tighten the noose on Russia.
This military decision, taken following years of futile negotiations and deceit, upsets the world order: the United States and the majority of European countries have imposed severe economic sanctions on Russia, thinking that its economy would collapse in a few weeks. But Russia is a huge, resilient country that has powerful allies (China, India, Brazil, Iran, etc.) and colossal mineral and hydrocarbon resources, unlike most European countries.
Result: the sanctions have become significant opportunities for enrichment for Russia, while the cost of energy has reached unprecedented levels in the EU, jeopardizing the economic fabric.
According l’analyse du Center for Research on Clean Air (CREA), Russia’s revenue from fossil fuel exports reached 158 billion euros from February to August, compared to the estimated 100 billion euros cost of Russia’s war. That’s 40% more than last year!
More surprisingly, the main outlet for these exports was the European Union, up to 54% of the total! As of September 6, 2022, the EU has bought nearly 88 billion euros of fossil fuels from Russia (nearly 50 billion € of oil, 35 billion € of gas and 3 billion € of coal).
The largest Russian importer of fossil fuels (gas, oil, coal) was the EU (85 billion euros), followed by China (35 billion euros), Turkey (11 billion euros), l India (7 billion euros) and South Korea (2 billion euros). Within the EU, the countries that imported the most fossil fuels were Germany (19 billion euros), the Netherlands (11.1 billion euros), Italy (8, 6 billion euros), Poland (7.4 billion euros), France (5.5 billion euros), Bulgaria (5.2 billion euros), Belgium (4.5 billion euros) and Spain (3.3 billion euros).
62% of Russian fossil fuel exports were transported on vessels owned by EU companies in July 2022. The vast majority of vessels transporting Russian fossil fuels are insured in the UK (51%) and Norway (22% ).
As for oil, Russian oil imports to the EU fell by 17% in July-August, compared to the start of the invasion, and are expected to fall by 90% when the ban comes into force in the end. end of the year.
Following the entry into force of the Russian coal embargo in the EU on August 10, 2022, Russia’s coal export volumes fell to their lowest level since the beginning of the invasion. So far, Russia has failed to find other buyers to compensate for the drop in demand from the EU, according to CREA.
For gas and oil, Russia has naturally turned to its economic partners such as China, India, the United Arab Emirates, Egypt and Turkey in particular.
Moreover, if the EU refuses to buy oil directly from Russia, it buys oil indirectly via third countries such as India, Saudi Arabia and China which act as intermediaries and sell Russian oil at a higher price. to the EU, the only big loser of its own sanctions.
A reality that is not shared by the spokesperson for the French government, Olivier Véran, who declared on September 7, 2022: “ The sanctions once morest Russia are effective! “. Same story with Italian Prime Minister Mario Draghi: “the sanctions are extraordinarily effective, the Russian economy is weakened“.
In fact, according to the Russian Federal State Statistics Service (Rosstat), Russia’s real GDP fell 4.1% in the second quarter year-on-year, following rising 3.5% in the first. The leaders of the decline were the wholesale and retail trade sectors (minus 14.1% compared to the same period in 2021), the utilities sector (water supply, waste disposal, etc.) — minus 9.2%, transport and storage – minus 3.9%, which might be due, among other things, to a reduction in Gazprom’s gas pipeline supplies to Europe. Growth was recorded by agriculture (+1.7%), construction (+3.4%), finance and insurance (+4.4%). The public administration, social security and military security sector, which includes, among others, the management, control and regulation of matters related to defense and the activities of the armed forces, increased by 1, 1%.
While Russia’s export volumes have fallen overall (-18%, of which -35% to the EU) since the start of the war, prices (gas, oil) have soared, further enriching all oil-producing countries. hydrocarbons and penalizing consumers, like the EU.
“Soaring global fossil fuel prices mean that Russia continues to generate record revenues from its fossil fuels, despite reduced export volumes. To combat this, governments must impose tariffs or price caps on imports from Russia and accelerate energy-saving measures. Particular emphasis should be placed on reducing oil and gas consumption by accelerating the deployment of clean energy and electrification through heat pumps and electric vehicles said Lauri Myllyvirta, principal analyst at CREA and one of the report’s authors.
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