Russia saw revenues from energy exports surge last month despite Western sanctions that include embargos and price caps on the country’s oil, German news outlet Handelsblatt reported on Thursday.
According to the publication, Moscow’s revenues from oil and gas sales grew 5.3% year-on-year in July and amounted to $8.66 billion. Profits were said to be the largest in gas exports, while those from crude sales rose by 2.6%. The outlet noted it was the first time this year that Russia had increased state revenues from energy exports in comparison with 2022.
Russia is earning more from energy exports and “thus is in a better position than a few months ago,” Giovanni Staunovo, a commodity analyst at Swiss bank UBS, told the news outlet. He claimed that as a result, many have started to doubt the effectiveness of sanctions on Russia.
Robin Brooks from the Institute of International Finance (IIF) noted that sanctions “can be very effective when used against countries with current account deficits,” which depend on loans from foreign investors on the global capital market to finance imports. He noted, however, that Russia is not among that group and argued that the restrictions imposed on it are becoming increasingly ineffective.
An EU embargo on seaborne exports of Russian crude was introduced last year along with G7 price caps on oil and petroleum products originating from Russia, in response to Moscow’s military operation in Ukraine. The measures were presented as an effort to deprive Moscow of funds to finance its military effort.
While the restrictions have barred Russia from accessing its traditional Western markets, they have triggered a large-scale reshuffle in global oil supply, with Moscow successfully redirecting exports to Asia. According to the latest OPEC calculations, Russia has been the largest exporter of oil to India for the past year, accounting for 45% of India’s crude purchases in June. It has also been China’s top supplier since January.
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