Russia’s oil profits soar despite embargo

Russia profits from oil exports despite an embargo from the United States and most of Europe, and it easily uses the profits to fund its ongoing invasion of Ukraine, reports The New York Times.

The reason, the Times notes, is that oil prices rose during the war, making Russia’s profits higher today than they were a year ago, even as it sells its exports at 30% below international market prices.

Oil exports accounted for 45% of Russia’s overall revenue in 2021, according to International Energy Agency figures, and it still did enough in the first 100 days of Ukraine’s invasion to more than replenish what he had spent on the war, the research group said.

Ukrainian officials give a smaller estimate, but still admit that Russia earns large amounts from its oil exports.

Ukraine has repeatedly called on countries and international companies to completely stop trade with Russia.

“We ask the world to do everything possible to cut off Putin and his war machine from all possible funding, but it’s taking far too long,” Oleg Ustenko, economic adviser to Ukrainian President Volodymyr Zelenskyy, told The Times.

“You can stop importing Russian caviar and Russian vodka, and that’s good, but definitely not enough. You have to stop importing Russian oil,” he added.

Despite the number of countries that have stopped receiving Russian oil imports, oil prices have risen by about 60%, the research firm found, so Russia’s price discount still gives it higher incomes more than a year ago.

Europe is struggling to free itself from Russian energy as it simultaneously sends military aid to Ukraine to fight the Russian invasion. Greater efforts are being made, albeit slowly.

Still, China remains Russia’s biggest importer of fossil fuels, while Japan is its biggest importer of coal, according to the Times. And Hungary, the Czech Republic and Slovakia will be exempt from a ban on Russian oil that will come into effect later this year.

India has increased its purchases of Russian oil, making Russia its top supplier ahead of Saudi Arabia, which previously held the top spot, according to the Associated Press. And Sri Lanka has signaled it is ready to buy Russian oil, its Prime Minister Ranil Wickremesinghe told the AP.

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