New markets and illicit tactics are part of Russia’s strategy for making up losses.
While Russia deals with increasing losses on the battlefield, gradually increasing sanctions have created their own pressure since the invasion of Ukraine began on February 24 of this year. Led by the United States and European Union, sanctions on Russia’s massive energy sector have forced the Russian economy to replace losses from the European market with both legal and illicit energy sales.
In the US, President Joe Biden issued an executive order prohibiting the import of Russian petroleum products, liquid natural gas (LNG), and coal products as of March 8, 2022. The European Union, a far larger market for Russian energy, will cease importing most Russian crude oil in December, and will stop importing refined Russian petroleum products two months later.
Overall, crude oil exports via cargo vessel trended downward in May, June, and July, with China, India, and Italy the top destinations for Russian crude oil, according to data from vessel trade analysis firm KPLER. During the first half of September, seaborne shipments of Russian crude oil continued to fall, by 314,000 barrels per day from the previous month, putting exports via ship at the lowest levels since the start of the war, according to S&P Global Insights.