- Despite massive sanctions from the West, Russia is making more money from its oil and gas trade.
- Russia is expected to make more than $320 billion from energy sales in 2022, up more than a third from 2021.
- Sales have been bolstered by new demand from India, lasting trade with China, and soaring prices.
- For more stories go to www.BusinessInsider.co.za.
The US, UK, and European Union all slapped Russia's energy sector with historic sanctions in hopes of curbing the country's invasion of Ukraine.
Despite those moves, Russia is selling more oil and gas today than it did before the war began.
The Russian government expects to rake in roughly $9.6 billion from energy sales in April, according to estimates from the country's finance ministry. The sum beat Russia's initial projections largely due to soaring prices for crude oil and natural gas. Russia is now projected to earn about $321 billion from energy exports in 2022, Bloomberg reported, up more than a third from 2021.
The projections fly in the face of massive sanctions imposed last month by the West. The US government placed a full embargo on Russian energy commodities, while the UK announced plans to gradually scale back its importing of Russian oil. The EU blocked imports of Russian coal while it continues to mull a ban on the country's crude.
The measures, announced within a short span of each other, aimed to cut off Russia's access to energy-export revenues and cripple its economy enough to end the war.
Yet Russia still has enough buyers to keep the energy sector afloat and its trade income strong. India has bought at least 13 million barrels of Russian oil since the invasion began, Reuters reported. That compares to the 16 million barrels it bought throughout all of 2021.
China also remains a buyer. While China's state-owned refiners have hit pause on approving new orders of Russian oil, they continue to respect contracts made before the invasion.
Even the EU is still making hefty payments to Russia for its oil and gas. The bloc relies on Russian exports for 40% of its natural gas and 27% of its crude oil. The EU is exploring plans to sever ties to Russia's energy trade, but it's still a major buyer for the time being.
Altogether the strong demand from several parties has bolstered the Russian government's balance sheet. The country is now bringing in $1 billion a day from its oil trade alone, Oleg Ustenko, an economic advisor to President Volodymyr Zelenskyy, claimed in a Sunday interview with South Korean media outlet MoneyS.
And the Russian government is still looking for more buyers. The country is ready to sell oil and related products to "friendly countries" in "any price range," Nikolai Shulginov, Russia's energy minister, said, according to the Izvestia newspaper.
The oil money is likely to keep rolling in for Russia, as India and China haven't indicated they'll change their trade programmes. Yet with the West prepping a new salvo of sanctions, Russia might have to work harder to get its oil and gas to paying customers.