Oil income: Will the Kremlin avoid economic losses?

Blocking Russian assets, rejection of Russian raw materials and cooperation with the financial sector - this list is expanding every day of illegal occupation of Ukrainian territories.

According to the Kyiv School of Economics, as a result of the rigid policy of sanctions by the US, the EU, the United Kingdom and other Ukrainian countries of Ukraine, the Russian Federation does not receive billions of dollars from exports of energy resources on a monthly basis and these losses will only intensify by the end of the year. How exactly sanctions restrictions have already affected the export structure of Russian oil and will affect the future - let's consider in the material below.

Let's start the multibillion -dollar consequences with key indicators. Thanks to complex sanctions and purposefulq policy of abandoning Russian energy resources, before the entry into force of the EU oil embargo in December 2022, the Russian Federation will lose $ 79 billion in oil profit by the end of 2023.

According to the International Energy Agency, in January-June 2022, Russia's income from oil exports in March decreased by $ 2 billion from expected indicators, in Vprina-by $ 8 billion, in May-by $ 6 billion, while in June 2022-by $ 7 billion. Thus, the Russian government has already lost more than $ 23 billion oil income due to adventure in Ukraine. KSE Institute analysts predict that the total decline in Russian income from oil exports from July to December 2022 will be another $ 58 billion.

This estimation is based on the expected oil and oil production price in accordance with the Russian Federation in OPEC+. As Russia compensates for export losses, it is obvious that every new day of war, the consumption of Russian oil and gas will be reduced. Market analysts and experts clearly see the long -term plans for EU countries diversify ways of supplying energy resources.

In addition, the Kremlin's energy blackmail demonstrates that it is not necessary to perceive Moscow as a reliable trading partner. All this has consequences in the volumes of Russia exported by Russia. Since the invasion of Ukraine, exports of Russian oil to the EU, the United Kingdom, the USA and the Asian OECD countries (Japan and South Korea) have decreased by 1. 6 million barrels a day. Thus, KSE estimates have already lost 10% of oil exports by volume.

It is obvious that in these conditions, the Russian Federation tries to activate in other markets of products. Over the past few months, China, India and Turkey have significantly increased the purchases of Russian oil - in May, the total importation of imports by these countries has reached 1. 3 million barrels per day. In some places it is about increasing purchases from 25% (in the case of PRC) and up to 800% (in the case of India).

Due to such actions, the Russian aggressor was able to make a lot of European revenues from the sale of energy. Despite the decrease in the volume of exported oil compared to April (an average of 200 thousand barrels per day), the amount of actual oil exports for the Russian Federation remained unchanged - $ 20 billion.

Whether the Kremlin can avoid economic losses even despite the increase in oil supplies to the Asian market, Russia will still significantly lose profits with every month of invasion of Ukraine. The reason for this is a significant reduction in the volume of raw material production due to the lack of demand from the main consumers of products. It is estimated that by the end of 2023 Russia will lose at least 4 million barrels of production per day or 36% of its maximum capacity.