We all thought the world’s sanctions against Russia were causing it to choke economically. The reality is, Vladimir’s probably rolling his eyeballs.
Incredibly, Russia experienced only “a small contraction in GDP in 2022,” according to France24. So for all those global efforts to financially kneecap Putin’s invasion of Ukraine, the Russian economy this year is expected to grow by 0.3%, says the International Monetary Fund (IMF).
Some of that is the result of rising oil prices that made up for the drop in sales, the report says. But Putin also got shrewd. He compensated by shifting sales in the last twelve months to the likes of Germany (almost $26B), Turkey (almost $26B), India (about $24B) and China ($66B).
India shipped $81M per day in February, 2023, up from $3M February a year ago. China purchased a record two million barrels a day in February, up from its typical 1.5 million, China’s General Administration of Customs Data reported.
Also on the customer list are Western democracies as the Netherlands, Italy, Poland, France, Belgium and Hungary, and even Australia. Yahoo News noted that Russia still profits $315B annually from global fossil fuel exports, with nearly half from the EU (despite them reducing sales by 55%).
Other sanctioned Western goods, moreover, were reportedly shipped through third parties, such as Kyrgyzstan, Armenia or Georgia. Cunning, Vlad.
And so all the oil sanctions and price caps were utterly as useless as Western politicians’ bluster and bombast.
The price cap, says one pundit, was “invented by bureaucrats with finance degrees. None of them really understand oil markets,” said Paul Sankey, president and lead analyst at Sankey Research. “It’s been a total bomb. It has failed completely.”
Agathe Demarais, global forecasting director at the Economist Intelligence Unit in the journal Foreign Policy said that foreign trade data isn’t being made public anymore, likely to spare the West from the embarrassment that the sanctions aren’t working.
In a stunning revelation, Bloomberg News recently acquired customs data on Russian crude oil buyers, with detailed invoice information from Dec. 5 to Dec. 31 2022. It showed six companies’ transactions that, all tolled, equate roughly to the oil imports of the United Kingdom – and which “catapult them into the leagues of the world’s largest commodity traders.”
Hong Kong-based Nord Axis Ltd, at just a year old, was the biggy, buying 521,000 barrels a day, from Rosneft PJSC. Tejarinaft FZCO, a Dubai company, bought 244,000 barrels a day, also from Rosneft.
Dubai-based QR Trading DMCC bought 199,000 barrels a day from Surgutneftegas. Hong Kong-based Concept Oil Services Ltd bought 152,000 barrels per day. Bellatrix Energy Ltd., a Hong Kong company owned by an Azerbaijani named Bilal Aliyev, bought 151,000 barrels a day.
And finally, decade-old Coral Energy DMCC, out of Dubai, purchased 121,000 barrels per day from Surgutneftegas PJSC. They stopped dealing with Russian oil as of January 1, 2023, according to its Chief Financial Officer Ahmed Karimov. Modern Diplomacy reports that owner Tahir Garayev, and oil trader Azim Novruzov, defend Coral’s decision. As interesting note, Azeri oil firm United Marine Logistics took a stand against Coral, by dismissing an owner of some of its vessels, Mathieu Philippe.
Bloomberg also reported the unintended consequence of sanctions: it “pushed the trade deeper into the shadows, and made it all but impossible for analysts and government officials to get hard data on who is involved in it.”
Meanwhile in Canada, Justin Trudeau’s speech on Feb. 24, 2023, the first anniversary of the Ukraine invasion, elaborated that Canada has sanctioned some 2,400 “key Russian individuals and entities,” including Russian parliamentarians, and members of their defense complex. The Liberal government said it is no longer doing trade with electronics or weapons materials, either. On Mar. 23, with President Biden, he spoke in passing of Canada’s aid to Ukraine.
He probably feels like he’s standing up to Kremlin’s madman. That’s very nice.
I’m fairly certain Vladimir didn’t so much as adjust his sleep mask.