Through sanctions imposed by Western states, in 2023 russia lost $67 billion of its oil and gas revenues.

This is the data from the Kyiv Security Forum study of the outcome of economic sanctions against russia in 2022-2023.

According to the document, “considering the fact that the objective of imposed sanctions was to encumber the russian capabilities to wage the war, the said sanctions look logical and well to the purpose. In 2023 compared against 2022, oil and gas revenues of the russian budget went down by $ 67 billion or 40%”.

The study authors claim that annual russian war-related expenditures equal $ 108 billion, so a shortfall of $ 67 means 62% of the above spending.

The study also emphasized failure of expectations that russian economy collapses thus putting an end to war. There were several reasons why this was not the case. russia was getting ready for war for quite some time, while bracing against the imposed sanctions.

“The fact of life is as follows. russia is the state having its own under-converted currency and, hence, has a free hand vis-à-vis emission policies. It does not depend on external financing despite all sanctions, and enjoys sufficient revenues from its exports making itself rather sustainable in domestic spending for a pretty long-term perspective”, - the study stresses.  

It is also indicated that the russian economy bore rather well the imposed sanctions on goods and services supply not solely because of the so-called “parallel importing” (grey-market import) or successful import substitution. Sanctions were primarily introduced by the states accounting for around 50% of russia’s external trade. At the same time, countries like China, Turkey and some others fail to adhere to sanctions regime in full, or apply partial sanctions only.

Speaking about financial sanctions, experts quote barring russia from SWIFT thus making it face the convertible currencies deficit and ruble depreciation. This also accelerated spikes of producer and consumer prices, making russia dependable on Chinese Yuan (CNY).

At the same time, freezing russian central bank assets is deemed to be one of the most successful economic sanctions. This has resulted in substantial depletion of the National Wealth Fund, as from March 2022 to January 2024 the liquid resources have gone down by 44 % (from 8,9 trillion rubles to 5 trillion rubles).

Experts envisage further potential sanctions tightening in secondary sanctions imposition and sealing off any supply of russian petrochemicals to states-parties to sanctions. In the same vein, oil tankers of the russian grey fleet should be blocked, russia must be put on the the FATF “black list”, and fines ought to be imposed on banks that assist circumventing sanctions.  

“Economic sanctions will have a truly devastating effect if russia fails to continue its exports of resources and raise respective funds. It is only then that the russian federation may become eligible to meet the conditions to lift sanctions,” the Kyiv Security Forum concludes.

Kyiv Security Forum, established by the Arseniy Yatsenyuk “Open Ukraine” Foundation, is the leading platform in this country to discuss issues of war and peace, of national and global security.