The Big Picture

Europe's Russian Revenue Conundrum

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  • An EU ban on Russian oil imports and aggressive plans to cut Russian gas imports are aimed at shutting off hydrocarbon revenues that help sustain Russia's war effort.
  • But high prices, staggered phaseouts and strong demand mean Russia's revenues have increased in the near term, undermining Brussels' key aim.
  • Revenue losses compared to a "no-war" scenario start to build from the fourth quarter, according to Energy Intelligence forecasts — assuming that Europe continues to prioritize its cutoffs and sanctions remain in place.

The EU is right now failing in its bid to choke off the revenues Russia receives from oil and gas exports — even if longer term, revenue losses from sustained Western sanctions will mount. But so far, Russian oil and gas export revenues have been on the rise, enjoying the post-Covid-19 surge in global commodity prices.

Sanctions, Oil Prices, Oil Trade, Oil Supply, Fiscal Terms
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