Putin’s €93bn Fossil Fuel Bonanza: Russia’s wartime income revealed by new data

The scale to which fossil fuel revenue is bankrolling Russia’s illegal invasion of Ukraine has been exposed thanks to detailed tracking of Russian oil, gas, and coal shipments and pipeline exports by the Center for Research on Energy and Clean Air (CREA).

According to the think tank’s new analysis, released today, Russia earned €93bn in revenue from exports of fossil fuels during the first 100 days of the country’s invasion of Ukraine, despite a fall in export volumes in May. And despite moves to curb imports from Russia, the EU still imported 61 per cent of all Russian fossil fuel exports over the period, worth approximately €57bn.

As such revenue from fossil fuel exports has been a major source of funding for Russia’s military aggression, providing 40 per cent of federal budget income. Revenues have increased due to high global fuel prices, despite a reduction in the overall volume of Russian exports.

Russia’s finance minister recently highlighted that the country’s earnings from fossil fuel exports will increase substantially this year, and some of this increased revenue will be used to fund what the Russian government continues to refer to as a “special operation” in Ukraine.

The huge pay day for Russian fossil fuel producers comes despite a concerted effort by much of the international community to reduce its reliance of Russian energy. The total volume of fossil fuel exports from Russia did fall by 15 per cent in May compared to before the invasion with the EU cutting daily imports from Russia by 20 per cent in May, led by sharply reduced demand from Poland, the Baltics, and Nordics . The prices paid for Russian oil were also 30 per cent below international market prices, as many countries and firms shunned Russian supplies.

The reduction in demand and the discounted prices cost Russia approximately €200m per day in May.

However, many observers remain concerned that European governments are not moving fast enough to curb imports of Russian oil and gas ahead of the seasonal winter increase in demand, and as such European consumers are inadvertently continuing to fund the Kremlin’s war effort.

“The progress to date is far too slow given Ukraine’s urgent need for support,” said CREA lead analyst Lauri Myllyvirta. “Much stronger action is needed to cut off the flow of cash to Russia. Globally, we need to speed up the deployment of clean energy to replace fossil fuel imports and ease the high fuel prices which are driving up Russia’s revenues.”

The analysis also shows how China has now overtaken Germany as the largest importer of Russian fossil fuels. China’s imports have inched up while Germany has managed a modest reduction in recent months.

According to the new analysis, the largest importer in the first 100 days of the Russian invasion was China with €12.6bn of imports, followed by Germany with €12.1bn, Italy with €7.8bn, the Netherlands with €7.8bn, Turkey with €6.7bn, Poland with €4.4bn, France with €4.3bn, India with €3.4bn, and South Korea with €3.4bn.

Poland and the United States made the largest dents in Russia’s revenue, reducing imports in May by €30m and €20m per day, respectively, compared with the time before the invasion. Lithuania, Finland, and Estonia also achieved sharp reductions of more than 50 per cent.

Kostiantyn Krynytskyi, head of energy at NGO Ecoaction, urged governments to now accelerate efforts to end imports of Russian fossil fuels. “We want to ensure Ukraine wins this war as soon as possible,” he said. “A complete and immediate embargo on all Russian oil, gas and coal is the key to peace in Ukraine. We do not want these hundred days of war to become the ‘first’ of many more.”


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