How long will Russia be able to finance the war?

After the European Union adopted the decision to introduce sanctions on the maritime export of Russian crude oil from December 5, 2022, as early as November 2022, it was observed: a significant decrease in the total volume of the maritime export of Russian crude oil through the ports in the Black Sea — for almost one million tons, decrease in exports to EU countries by almost 0.5 million tons, decrease in exports to other countries, except in the EU, by almost 0.5 tons. Simply put, the data speak of the Russian Federation's failed attempts to replace exports to EU countries with exports to other countries.

In November 2022, the reduction of exports via Black Sea ports to EU countries by almost 0.5 million tons was ensured by one of the four EU countries — Italy, which imported 538,779 tons less than in October. On the other hand, Greece increased its imports in November, before the embargo, to 29.5 percent compared to the previous month.

The diversion of crude oil exports of the Russian Federation to India and China, which is often reported in the media, is not noticed, at least when it comes to transportation through the Black Sea ports. In October-November 2022, exports to India decreased in both months, and exports to China from Black Sea ports stopped. In November 2020, 51 percent of Russian crude oil exports to other countries (except the EU) depended on two countries — India and Turkey. In October 2022, Turkey became the absolute leader of the "rating". India lost its lead, its share was only 23 percent, while Turkey's share was 46 percent. However, in November 2022, it turned out that the increase in the volume of exports to Turkey was temporary, and both leading countries showed a decline in indicators.

After the decision on the future embargo on June 3, 2022, the EU introduced a six-month transition period — June-November. During that time, nine EU countries and the US imported 9.3 million tons of Russian crude oil through Black Sea ports. The price of this exported oil is estimated at 5.3 billion dollars for six months, or an average of about 0.9 billion dollars per month, or 10-11 billion dollars per year.

In that case, if the oil delivered via the Black Sea to the EU countries remains unsold to other buyers, then Russia may not receive approximately the same amount of revenue from the export of crude oil via the Black Sea ports, which amounted to 10 to 11 billion dollars per year.

In the complete picture of Russian energy exports, it looks like this:

— In 2021, Russia exported 118.5 million tons of oil through sea ports, which is 51.54 percent of total oil exports. The share of seaborne exports through Black Sea ports in different years amounted to 16 to 25 percent of the total volume of seaborne crude oil exports of the Russian Federation. The main export ports for Russian oil are Novorossiysk (Black Sea), Primorsk and Ust-Luga (Baltic Sea), Kozmino and Prigorodnoye (Pacific Ocean).

— In 2021, Russia earned $253.2 billion from energy exports, including $180.1 billion from exports of crude oil and petroleum products.

 

— In 2023, Russia plans to spend about 143 billion dollars on defense.