Originally published on Forbes.com on June 14, 2022

In May 2022, Russia’s export revenue from fossil fuels had increased to $0.9 billion/day, an increase of 39% from pre-war May 2021.

The Russian war on Ukraine started on February 24, 2022, has been going on for about 100 days. Exports of fossil fuels from Russia have been widely quoted as funding the Russian war and its atrocities.

Sanctions have been applied by the West to reduce their purchase of Russian oil and gas. Russian oil is more important because Russia’s export revenue of oil and its liquid products is much greater than the export revenue of natural gas.

The US and Poland stopped their imports of Russian oil, but these were not large fractions of their energy consumption. Lithuania, Finland, and Estonia achieved sharp percentage reductions of more than 50%. The UK announced it would stop importing Russian oil by the end of 2022. German imports from Russia are down from 35% at the beginning of the war in Ukraine to 12% now. The EU countries agreed to a stoppage by end of 2022 but allowed a few waivers for countries like Hungary and Slovakia.

Fossil fuel exports in past 12 months.

A new report from the Centre for Research on Energy and Clean Air (CREA) has collected fossil fuel transport data from pipelines and shipping trades, enough data to estimate Russian export revenues, map trends and suggest reasons for the trends.

In May 2021, the Russian export revenues were EUR 633 million/day (note: currently 1 EUR is close to the value of 1 dollar). Between May 2021 and May 2022, export volumes dropped by EUR 95 million/day. The discounted price of Russian oil, etc, led to a drop of EUR 101 million/day. So far, it seemed the sanctions were working.

But in that 12 months period, the increasing price of fossil fuels on the global market overwhelmed both these effects and resulted in an increase of export revenue to Russia of EUR 447 million/day. Russia’s average export prices were an average 60% higher than last year. By May 2022, the export revenue had increased to EUR 883 million/day – an increase of 39% from pre-war May 2021.

The price of oil today is above $120/barrel. And Russia is pulling in almost EUR 1 billion/day, or $1 billion/day, in export revenues from fossil fuels. With that, you can pay for a huge war effort aimed at Ukraine.

President Putin had claimed that embargoes by the West on Russia’s oil and gas would backfire and lead to global price increases. This seems to have come true, although it’s hard to tease out the different causes of increasing global demand for oil and gas.

Other findings from the report.

The EUR 93 billion that Russia took in from fossil fuel exports in the first 100 days of the war is close to $1 billion/day with the current exchange rate. About 60% of this came from the EU, which is why it’s a big deal for the EU to stop buying oil and gas from Russia. Note that coal is a very small fraction of fossil fuels exported by Russia.

The split in this EUR 93 billion export revenue is as follows: crude oil: 46 billion, oil products: 13 billion, pipeline gas: 24 billion, LNG: 5.1 billion, and coal: 4.8 billion.

In this period, China, Germany, France, India, United Arab Emirates, and Saudi Arabia all increased their imports of oil from Russia. China is the largest importer now, since Germany has cut back.

India is a chameleon. They imported nothing in January 2022, but this shot up to 28 million barrels of crude in May 2022. The country now buy’s almost 20% of Russia’s crude exports. This is controversial since significant amounts of products from India’s refineries are then exported to the US and Europe, according to CREA. This isn’t supporting the sanctions.

Another aspect that seems to have been overlooked is tanker shipping of crude oil from Russia. This has become critical. CREA said that in the April-May period almost 70% of shipping was carried by tankers that belonged to EU, UK, Norwegian, and Greek companies – with Greek tankers carrying over 40% of the Russian crude. This door needs to be closed.

In a further revelation, CREA pointed out that in the first two months of the war, 23 large companies purchased fossil fuels from Russia. And that 15 of those companies were still buying in May 2022. These included big oil companies: Exxon, Shell, Total, Repsol, Lukoil, Neste, and Orlen.

The current state of high energy prices and the goal of the West to stop depending on Russia’s fossil fuels for Ukraine’s sake has set up a tug-of-war. On one side, oil and gas interests want to increase production to lower the cost of gasoline for our cars. On the other side, this is an opportunity to accelerate renewable energies and electric vehicles that run on wind and solar, and hydropower. The next eight years to 2030 should give us a clearer view of which side is winning.