Russia’s relentless assault of Ukraine is now in its third week. The West has responded with a barrage of economic sanctions aimed at the country’s financial system.
While the US has said that it will end imports of Russian oil and gas — an industry that contributes around 40 per cent of Russia’s federal budget — the UK has promised only to phase out Russian oil by the end of this year, and the EU has said it will only end imports from Russia by 2030.
The EU’s heavy reliance on Russian energy -- it gets 40 per cent of its gas imports from Russia, 40 per cent of its diesel and 30 per cent of its oil -- puts its leaders in a difficult position on sanctions. The soaring price of fossil fuels, largely resulting from economic restrictions placed on Russia, means that the amount of money Russia receives in import payments has in fact surged since the start of the war.
Modelling by the Belgian think tank Bruegel, based on the daily European gas spot price, shows that the value of daily EU imports of Russian gas increased from around €200m at the start of the year to more than €800m at the start of March.
Separately, Bloomberg reported this week that Russia could receive an extra $65bn from oil exports if prices remained around $90 a barrel.