Russia Has Been Exporting $1 Billion in Fossil Fuels on a Daily Basis Since the Russo-Ukrainian Conflict Broke Out
Western politicians promised to destroy Russia’s economy with a wide array of sanctions after the nuclear power invaded Ukraine on February 24, 2022. However, that scenario has not come to pass.
In fact, Alex Kimani of OilPrice.com noted that “Russia’s vast energy sector continues to thrive, with the country managing to export nearly a billion dollars worth of fossil fuels per day in the first 100 days since its invasion of Ukraine.” Russia is doing so despite the massive sanctions imposed on it.
Rising crude oil and fuel prices have given Russian oil and gas companies a much-need boost in revenues.
In fact, there is still a significant number of buyers for Russian oil and gas. Major emerging markets such as China and India have stepped in to make up for the bulk of lost Western markets for Russian energy.
India has traditionally not been a major buyer of Russian crude oil. Kimani noted that India usually imports around 2% to 5% of its crude oil from Russia. In 2021, India imported 12 million barrels of Russian crude oil in 2021. Its principal oil sources come from Iraq, Nigeria, Saudi Arabia, and the United Arab Emirates.
However, in May, new reports show a marked increase in Russian oil imports to India.
Per a Bloomberg report, India spent roughly $5.1 billion on Russian oil, gas, and coal in the first three months following Russia’s military incursion into Ukraine, which Kimani observed is “more than five times the value of a year ago.”
Currently, China is still the biggest buyer of Russian energy commodities. It spent $18.9 billion in the first three months after the Russian special military operation, which is nearly double the amount China spent in 2021.
Additionally, international commodity firms are playing a key role in keeping Russia’s economy afloat.
Kimani observed that “a lot of the companies helping finance Putin’s war are based in Switzerland, with the lion’s share of Russian raw materials traded via Switzerland and its nearly 1,000 commodity firms.”
Switzerland is renowned for being a key global financial hub with a booming commodities sector.
German media outlet Deutsche Welle highlighted that 80% of Russian raw materials are traded through Switzerland, per a report by the Swiss embassy in Moscow. Roughly a third of those materials being traded are oil and gas. In addition, two-thirds of the raw materials are base metals such as aluminum, copper, and zinc. Kimani simply noted that “deals signed on Swiss desks are directly facilitating Russian oil and gas to continue flowing freely.”
Gas and oil exports are the primary source of income for Russia, which comprise 30% to 40% of the Russian budget.
The West is getting a cold, hard dose of the new reality that is emerging under multipolarity. The world is more than just the US and the broader West. There are many countries who desire strong economic and political ties with Russia.
In trying to bully Russia with NATO expansion and other subversive efforts to undermine the current regime, the West inevitably sowed the seeds for the present security conflict. On top of that, the current sanctions war and the efforts to diplomatically isolate Russia have turned into a massive own goal for the West.
Ironically, the West appears to have isolated itself on the world stage as it pursues an unhinged foreign policy towards Russian that most of the world is not in agreement with. Western policymakers will need to re-assess their Russia policies and recalibrate them in a direction that is more realist and restrained in nature.
Ultimately, that will require a totally different ruling class to take power for that to happen.
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