Despite sanctions and boycotts, Russia could still rake in $800 million a day from oil and gas this year — more than it pulled in last year
- Despite sanctions, Putin's regime has been holding up, as the country is a commodity powerhouse.
Energyprices have surged since the war in Ukraineand the EU still can't do with Russian gas.
President Vladimir Putin's regime has been holding up so far as oil prices have risen about 50% this year and are at 13-year highs. The gains could bring Russia's oil and gas sales to total $285 billion this year, Bloomberg forecasts. This is 20% higher than the country's $235.6 billion takings from oil and gas in 2021.
The European Union's (EU) reliance on Russian energy is contributing to Moscow's windfall, as the bloc gets about 40% of its
On Monday, the EU agreed to slash 90% of Russian oil imports to the bloc by the end of 2022 — but some countries in the group, including Germany, Europe's largest
Meanwhile, countries like China and India are buying discounted Russian oil, further undermining international sanctions.
Notably, that forecast $800 million a day windfall is from energy alone. Russia is also a major producer of other
The country's earnings from the raw materials trade are likely to exceed $300 billion this year, per Bloomberg Economics. This could offset the same amount in Russia's foreign reserves that have been frozen under international sanctions.
Russia's gains from the commodities rally predate the war as prices of raw materials have been on the up due to supply-chain challenges and recovering demand as pandemic restrictions ease. Russia's invasion of Ukraine worsened trade dislocations and pushed up prices even more as the two countries are key commodity exporters.
"If the goal of sanctions was to stop the Russian military, it wasn't realistic," Janis Kluge, a senior associate for Eastern Europe and Eurasia at the German Institute for International and Security Affairs, told Bloomberg. "It can still fund the war effort, it can still compensate for some of the damage sanctions are doing to its population."
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