Russia is now earning more money from fossil fuel exports than before the start of its military operation in Ukraine – which prompted Western nations to target Moscow with a barrage of sanctions – US Senior Advisor for Global Energy Security Amos Hochstein told American senators on Thursday.
Global energy prices, already on the rise before the February offensive, have been driven higher by the embargoes, which have helped Moscow alleviate the impact of restrictions, the official admitted. Hochstein has previously served as the US energy security envoy.
When asked whether Moscow was receiving more money from its oil and gas trade compared to several months ago, Hochstein replied: “I cannot deny that.” The official was speaking to the Senate Subcommittee on Europe and Regional Security Cooperation.
The US moved to restrict all imports of Russian crude oil, some petroleum products, liquefied natural gas, and coal in early March as part of a sanctions drive sparked by Russia’s military action in Ukraine. On Wednesday, Russia’s State Duma speaker, Vyacheslav Volodin, said, however, that oil deliveries from Russia to the US had “almost doubled in March compared to February.”
The EU – which has long been reluctant to impose restrictions on Russian oil imports and targeted the financial and banking sectors with its sanctions instead – agreed to introduce a ban on Russian oil in late May. The bloc decided to stop 75% of imports immediately, and 90% by the end of the year. However, Hungary and several other countries were given a waiver due to the inability of their economies to cope without Russian supplies.
Meanwhile, media reports have suggested that the sanctions have hardly affected Moscow’s energy trade so far. In April, the Wall Street Journal reported that Russian oil shipments had grown by 300,000 barrels a day that month alone.
In mid-May, Bloomberg claimed that Moscow's oil revenues were soaring in spite of sanctions and jumped some 50% since the beginning of 2022. The Russian government has also pointed to new customers in the Asia-Pacific region which have started buying its crude.
India has been one example, as Russian oil exports jumped by a whopping factor of 25, in May, according to Reuters. Meanwhile, the sanctions drive has seemingly backfired on the Americans and their allies. US President Joe Biden declared a state of emergency over energy, earlier this week, by saying that the nation’s ability to provide sufficient electricity was under threat.
Last weekend, the American Automobile Association (AAA) reported that US gasoline prices had doubled under Biden and reached all-time highs, amounting to $4.81 per gallon last Saturday. On June 1, the International Energy Agency warned that EU members, which also face soaring gasoline prices, might resort to fuel rationing in the face of an unprecedented energy crisis.