Money and Markets

Russia is raking in money from oil and gas exports — but it has nowhere to spend it

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German vice-chancellor and economy Robert Habeck said the country is "ashamed" it hasn't been able to reduce its dependence on Russian gas significantly.
  • Germany continues to rely on Russian natural gas imports.
  • German vice-chancellor Habeck said the country is "ashamed" that it still buys gas from Russia. 
  • But, he said, sanctions are making it difficult for Putin to spend proceeds from oil and gas sales.
  • For more stories visit Business Insider.

Russia may still be raking it in from its oil and gas sales, but Moscow can "hardly spend" money due to sweeping sanctions, said German vice-chancellor Robert Habeck, as reported by Deutsche Welle. 

"The income that Putin has obtained in recent months because of high prices hurts, and we can only be ashamed that we haven't yet managed to reduce this dependence more significantly," said Habeck, who is also Germany's economy minister, per DW.

"Putin is still getting money, but he can hardly spend it anymore," he added.

Germany has condemned Russia's invasion of Ukraine and joined in sanctions. But Europe's largest economy continues to rely on Russian natural gas, drawing criticism that it's funding President Vladimir Putin's regime and its war in Ukraine. Germany gets about 35% of its natural gas supply from Russia and could fall into a steep recession if the fuel were to be cut off, a top banker said in April.

In the first two months of the Ukraine war, which started on February 24, Germany was the most significant individual buyer of Russian fossil fuels, spending 8.3 billion euros ($8.9 billion) on imports, according to a report by the Centre for Research on Energy and Clean Air (CREA) published on April 27.

Habeck told lawmakers in Berlin that Germany must work harder to cut its reliance on Russian natural gas, but added that sanctions were already taking their toll on Russia's economy and that Putin "can't keep going much longer," according to Bloomberg. For instance, Russia has lost access to security updates for airplanes — which means they could soon be grounded.

"Time is not working for Russia. It is working against Russia, it is working against the Russian economy," said Habeck, per DW.

Germany will wean itself off Russian gas by mid-2024, Habeck said in a March 25 press release.

"While taking resolute action, we are considering our options with prudence. Even if we become more independent of Russian imports, it is still too early for an energy embargo," he said. "The economic and social consequences would still be too severe. But every supply contract which is terminated damages Putin." 

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