Russia's Exports Surge Despite EU Sanctions

Recent reports indicate that Russia has managed to increase its exports by nearly 20% despite the imposition of 17 sanctions packages by the European Union. According to an analysis conducted by the Institute of the German Economy (IW) in Cologne, Russia's export revenue reached approximately $330 billion in 2024, providing substantial financial support for the Kremlin's military operations in Ukraine.

While trade with Western nations, including Germany and the United States, has sharply declined--by as much as 92%--Russia has significantly expanded its commercial ties with countries in the Global South. Notably, India and China have emerged as key consumers of Russian oil and gas, contributing billions of dollars to Russia's economy.

Interestingly, some EU member states, such as Hungary, along with countries like Brazil, Turkey, and Israel, have reportedly increased their imports of Russian goods. This shift in trade dynamics has allowed Russia to adapt to the sanctions and explore new markets, with officials claiming that the nation has successfully adjusted to the economic restrictions imposed by the West.

Despite acknowledging certain economic challenges due to sanctions, Russian President Vladimir Putin has ramped up the country's wartime economy. He has consistently asserted the importance of fulfilling Russia's obligations regarding arms exports, even amidst ongoing conflicts.

To further diminish Russia's revenue from oil exports, the IW has recommended lowering the price cap set by the EU on Russian oil, currently set at $60 per barrel. Discussions are underway to potentially reduce this cap to $45 per barrel in the upcoming 18th EU sanctions package. In contrast, Ukrainian President Volodymyr Zelensky has advocated for an even lower price cap of $30 per barrel.

The IW also suggests taking more stringent measures against the shadow fleet, which includes older vessels used by Russia to transport oil to countries like India without detection.