How Russia Has Earned $386 Billion Selling Oil and Gas Since the War Began

When Gazprom, the Russian natural gas giant, said this week its profits had plummeted by more than 40 percent, the headline looked like convincing evidence that Western sanctions were hitting the Kremlin hard. After all, the energy industry is the lifeblood of the Russian economy—and state-owned Gazprom is one of the country’s biggest companies.

But here’s another economic indicator: According to the most recent figures, Russia still earns more than half a billion dollars a day in revenues from fossil fuel exports. And in April, Russia exported more oil than in any month since the outbreak of the Ukraine war. 

All told, Russia has raked in an estimated $386 billion from fossil fuel sales—everything from oil and gas to coal—since the beginning of the war in Ukraine, according to the Finland-based Centre for Research on Energy and Clean Air (CREA). 

All that money is critical to filling the Kremlin coffers and making it possible for Russian President Vladimir Putin to prosecute his war against Ukraine.

Who is buying?

A big chunk of the $386 billion has come from the European Union (EU), which has spent an estimated $166 billion on Russian fossil fuels over the past 15 months. This is despite the EU’s steadfast political and military support for Ukraine - and is a result of its long-running dependence on Russian energy. 

“Several bad decisions had made Europe extremely dependent (on Russian energy) in the years before the war,” Kristine Berzina, a security and defense expert at the German Marshall Fund (GMF), told The Messenger. 

Before Putin’s invasion, the EU relied on Russia for around 40 per cent of its natural gas; the bloc also bought large amounts of Russian oil. Over the past year, the EU has worked to turn off those taps—European reliance on Russian gas has dropped to under 10 per cent. But cutting the cord entirely will take time; the EU has pledged to end its dependence on Russian fossil fuels by 2027. 

The next biggest buyer of Russian energy supplies - and one that shows no sign of slowing its purchases - is China. Weeks before the Russian invasion of Ukraine, Putin and the Chinese President Xi Jinping declared a “no-limits” partnership. Among the more concrete elements of that partnership have been a willingness to buy Russian fossil fuels: roughly $88 billion since the war began, including $25 billion this year. Estimates from CREA show that China is now the world’s leading buyer of Russian fossil fuels.

Other major buyers include countries with close ties to both the U.S. and Russia. India—whose leader, Narendra Modi, will visit the White House for a state dinner next month—is estimated to have spent around $12.5 billion on Russian energy since the beginning of this year, most of it on Russian oil.  

Turkey, a NATO ally that has supplied weapons to Ukraine in the aftermath of the invasion, is estimated to have spent just under $10 billion on Russian energy this year. Other U.S. allies—Japan, South Korea and Egypt—have bought roughly $4.5 billion in energy supplies from Russia since January. 

What about the sanctions?

Overall, Russia’s energy revenues are down from pre-war levels. At the time of the Russian invasion of Ukraine, the country was earning around $1.2 billion a day from selling fossil fuels; the latest figures showed a drop to around $600 million a day. Russia is also selling oil at a steep discount—which might sound like a problem for Moscow (lower revenues), but the lower price has enticed many countries to come to Russia rather than other oil suppliers. 

Given that the West had resolved to bankrupt Russia with its raft of sanctions, $600 million a day is still a staggering figure. And it raises the question of how Russia has managed to get around the restrictions. 

“Russia has been very clever,” the GMF’s Berzina told The Messenger. 

Berzina and other analysts say that Russia has actively planned for life after sanctions since its 2014 invasion of Crimea. That invasion sparked discussion in the West about possible sanctions on the Kremlin’s key revenue sources—and that, Berzina explained, gave Russia ample time to find workarounds and new markets. 

“The West effectively showed its cards,” she said. As for the current situation, she added, “Yes, Russia is selling less, and yes, it is shipping less. But it is still selling and still shipping.” 

Russia “has not been decapitated,” Berzina said, repeating a word used by western officials when the first sanctions were announced last year. “Russia has been significantly weakened, but it continues to do a lot of business.”