Russian Oil Exports Under International Sanctions

We use a unique, comprehensive transactions-level dataset on Russian exports to evaluate the impact of international sanctions—focusing on crude oil and oil products. Relying on data through the first quarter of 2023, we find that the sanctions coalition’s strategy to keep Russian oil on the global market, while restricting the country’s export earnings and fiscal revenues, is showing results. Importantly, global oil prices did not increase since the taking-effect of the EU embargo on crude oil on December 5, 2022—a key concern of some coalition governments. Rather, discounts on Russian crude oil exports widened considerably in segments of the market, where demand conditions changed due to the exit of European buyers. Russian crude oil and oil product exports, in value terms, fell by $15.6 billion in 2023Q1 vs. 2022Q4 and account for 40% of the total decline in goods exports. We estimate contributions of 6.1 billion from smaller volumes, $4.2 billion from lower global prices, as well as $5.2 billion from wider discounts. At the same time, 2023Q1 budget revenues from hydrocarbons came in 47% below the previous quarter. Even so, our findings also point to violations of the price cap and underscore the urgent need for more rigorous enforcement. Specifically, export prices at the critical Pacific Ocean port of Kozmino stood at around $73/barrel in 2023Q1—with 96% of volumes sold above the $60/barrel threshold—, while a substantial share of shipments continues to involve Western-owned or –insured vessels. Based on our analysis, we conclude that a critical focus of sanctions policy going forward should be the enforcement of existing sanctions on Russian oil.

Keywords: Russia Invasion of Ukraine, Russian Oil Exports, Sanctions

JEL Classification: E60

Suggested Citation: Suggested Citation

Hilgenstock, Benjamin and Ribakova, Elina and Shapoval, Nataliia and Babina, Tania and Itskhoki, Oleg and Mironov, Maxim, Russian Oil Exports Under International Sanctions (April 26, 2023). Available at SSRN: https://ssrn.com/abstract=4430053 or http://dx.doi.org/10.2139/ssrn.4430053