Russia’s Oil Exports: Same Barrels, Half the Ruble, Zero Chill

Photo by Konstantin Kitsenuik on Unsplash

KEY POINTS

•The US Treasury sanctioned major Russian oil producers Lukoil and Rosneft in late October, reducing their seaborne oil shipments by 42%.
•Russia quickly rerouted shipments through smaller producers, causing only a minimal 100,000 barrel per day drop in total exports despite sanctions.
•Energy revenues plummeted nearly 50% this year, severely impacting Russia’s funding for the Ukraine war amidst ongoing drone attacks and a strengthened Ruble.

Despite the US Treasury putting Lukoil and Rosneft—the Russian oil power couple—under sanctions in late October, Russia’s total oil shipments only dropped by 100,000 barrels per day. Fancy that! Moscow rerouted exports through smaller producers so fast it made traffic cops dizzy. Yet revenues have plunged 50%, going from a robust 7.6% of GDP down to a sad 3.7%, thanks to a Ruble playing strongman and Brent prices giving dramatic discounts as buyers play ‘How Low Can You Go?’ This cash crunch hits Kremlin’s war chest while drone attacks on infrastructure keep buzzing. Meanwhile, Putin and Trump’s envoys met for five hours to discuss peace, and no, it did not turn into a buddy cop movie ending in compromise.