Media: Russia avoided the collapse of the economy

Media: Russia avoided the collapse of the economy

Journalists reported that due to the full-scale invasion of Ukraine, the Russian economy faced a deep recession, but at the same time its economic performance was more stable than experts predicted.

Media: Russia avoided economic collapse

The Russian economy is largely dependent on oil, and it is this spectrum that has suffered significantly due to the sanctions. However, Russian oil is still bought by such giants as China and India, as a result of which the economic collapse did not happen.

CNN reports this.

According to the International Energy Agency (IEA), between March and July of this year, Russia's revenues from the sale of oil and gas to Europe doubled compared to the average figures for previous years. This happened despite the decrease in export volumes. Expert estimates show that there has been a drop in gas supplies to European countries by about 75% over the past year.

Curiously, the same agency predicted in March of this year that 3 million barrels of Russian oil would be released from the market from April, which should have been due to sanctions. However, this did not happen.

This summer, a slight drop in exports is recorded, but still it has been preserved. This is due to the entry into new markets in Asian countries. According to Humayun Falakshal, an expert from the consulting company Kpler, since February 24, the day the war in Ukraine began, most of the sea exports of Russian oil went to Asia. For comparison, in July last year, this share was 37%, and this year – 56%.

In addition, between January and July, the Chinese government increased imports of Russian Urals crude oil at a discount by 40%. Over the same period, maritime imports to India will increase by more than 1700%. Russia has also increased gas exports to China thanks to the Siberian pipeline.

Despite all this, according to experts, after the December European embargo on 90% of Russian oil comes into force, the situation for the Russian Federation will become critical. About 2 million barrels of oil a day will be in limbo. It is highly likely that some of it will go to Asian countries, but it is unlikely that demand will be so high that it can absorb all the oil.

Russia's energy sector benefits from global inflation, but at the same time it harms Russians. Like Europeans, the Russian population is already facing a worsening cost-of-living crisis.

The biggest impact on Russia's long-term economic prospects could be technological sanctions that will push the Kremlin back in the technology race between the world's nations. According to a founding partner of the consulting company Macro Advisory, the sanctions pressure on the Russian Federation does not take the form of a “quick strike”, but a “slow burn”. As a result, a “long period of stagnation” is predicted.