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Russia on track to make more money off oil, gas exports this year, and it's got the EU to thank

Business Insider US
Russian President Vladimir Putin.
  • Russian oil and gas sales could hit $285 billion this year, outstripping last year's takings by 20%.
  • Europe is a major buyer of Russian energy products, accounting for about 50% of its crude oil exports and 75% of its natural gas exports in 2021.
  • Germany was the biggest buyer of Russian energy in the first two months of the war.
  • For more stories visit Business Insider.

Russia's invasion of Ukraine is entering its 100th day on Friday, with no clear end to the war in sight.

Despite intensifying sanctions, Russia could still rake in $800 million a day from oil and gas revenues this year amid soaring energy prices, according to Bloomberg Economics.

Russia's coffers have been bolstered by a rally in oil prices, which have risen about 50% this year and are at 13-year highs. The gains could bring Russia's oil and gas sales to a total of $285 billion this year, Bloomberg forecasts. That's 20% higher than the country's $235.6 billion takings from oil and gas in 2021.

Much of the windfall can be traced back to the European Union (EU), due to the bloc's reliance on Russian energy.

The EU gets about 40% of its natural gas from Russia and has been struggling to wean off the fuel. Some EU countries — including Germany, Europe's largest economy — are heavily reliant on the product.

According to the US Energy Information Administration (EIA), Europe is a key destination for Russia's energy exports. Overall, Europe is a major buyer of Russian energy products, accounting for about 50% of the country's crude-oil exports and 75% of its natural-gas exports in 2021, according to the EIA.

In the first two months of the Ukraine war, which started on February 24, the EU splashed out 39 billion euros ($41.5 billion) on Russian fossil fuels, accounting for 70% of the country's exports. This made the bloc "by far" the largest buyer of Russian fossil fuels, according to a report by the Centre for Research on Energy and Clean Air (CREA) published on April 27.

Germany was the biggest individual buyer, spending 8.3 billion euros ($8.9 billion) on the imports, according to the report. The second-largest EU buyer was the Netherlands, which spent 6 billion euros ($6.4 billion.) Italy came in the third with 4.3 billion euros ($4.6 billion) in purchases.

Sanctions against Russia over the war in Ukraine have "been undermined by continued fossil fuel imports from Russia, particularly to the EU," the CREA said in its report.

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

The research organization acknowledged the EU's efforts in setting new clean energy targets as the bloc weans itself off Russian energy, but added that it will not be an immediate fix.

"These steps will provide a replacement for Russian fossil fuels over the next few years, but they have essentially no effect on Russia's fossil fuel export revenue in the short term," per the CREA.

Germany will wean itself off Russian gas by 2024, the country's economy minister Robert Habeck said in a March 25 press release.


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