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Russia has made $66 billion from fuel exports since it invaded Ukraine - and the EU is still its biggest buyer, study finds

Apr 28, 2022, 17:45 IST
Business Insider
A Shell gas station in Leningradskoye Highway, Moscow, Russia.Valery Sharifulin/TASS/Getty Images
  • Russia received $66 billion in fossil fuel imports in the two months since its invasion of Ukraine, a study found.
  • The European Union bought Russian fossil fuels worth $46 billion, with Germany emerging as the top buyer.
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Russia earned $66 billion from fossil fuel imports in the two months since its invasion of Ukraine as it profited from surging commodity prices despite facing tough sanctions, according to a study by an independent research group.

Of that, the European Union imported 71% of Russian fossil fuels worth $46 billion through shipments and gas pipelines, the report by the Centre for Research on Energy and Clean Air showed.

This compares with imports worth roughly $147 billion for the whole of 2021, or about $12.3 billion a month, the Guardian reported.

Germany was the largest importer — receiving orders worth $9.6 billion. Italy, China, Netherlands, Turkey, and France were the next biggest buyers, the study found.

The research highlights how Russia has continued to benefit from energy exports, a key source of revenue for the economy, despite Western nations moving to sanction the country over its aggression in Ukraine.

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Centre for Research on Energy and Clean AirCentre for Research on Energy and Clean Air

While the US and UK have imposed bans on Russian energy imports, the EU has so far agreed to only ban Russian coal. Because these moves have a direct effect on the global energy market, prices of oil and gas have soared due to the twin threats of lower supply and fading import volumes.

Some countries have tried to "self-sanction" by avoiding Russian fossil fuel imports. Foreign oil deliveries from Russia dropped 20% in the first three weeks of April compared to the period before the invasion, the CREA data showed. But the economy has been able to offset lower volumes with higher prices, which means its revenue nearly doubled compared to the previous year despite curbs on exports.

Shipping data also showed that Russia is struggling to divert cargoes originally meant for European buyers. The Wall Street Journal recently reported more than 11.1 million barrels leaving Russia have been loaded onto cargoes with unknown destinations.

Centre for Research on Energy and Clean Air

Meanwhile, the EU has struggled to shake off its dependence on Russian imports — especially gas — despite wanting to reduce its reliance. Figures indicate the bloc has attempted to cut Russian supplies, as data compiled by think tank Breugel shows the bloc's imports of Russian gas were 26% lower in the first week of April than in the same period in 2021.

But Russian President Vladimir Putin doesn't seem to be as threatened by a European ban on energy as EU leaders perhaps might expect him to.

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"The so-called partners from unfriendly countries concede themselves that they won't be able to make do without Russian energy resources, including without natural gas, for example," he told a televised government meeting on April 14, Reuters reported.

The CREA said fossil fuel exports have helped fund Putin's war against Ukraine, and recommended replacing Russian fossil fuel imports with clean energy.

"Fossil fuel exports are a key enabler of Russia's military buildup and brutal aggression against Ukraine," it said in the report.

"The EU and many European countries have already announced ambitious new clean energy and energy efficiency targets, policies and measures — these will provide a replacement for imports from Russia over the next few years. But imports need to stop now," it added in a tweet.

Read More: The 8 ESG leaders recruiters wish they could hire as Wall Street's battle for sustainable investing talent heats up

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