Sanctions on Russian oil slash revenue, Western-backed IEA finds


March 15 (UPI) — Sanctions may be catching up with Russia with data Wednesday showing oil export revenue declined last month by $2.7 billion from January levels.

Western powers enacted tight sanctions on Russia last year in response to its invasion of Ukraine, hoping to rob the Kremlin of the revenue it needs to keep fighting the war. Limits on crude oil, refined petroleum products and natural gas were imposed on Russia, which comes on top of a cap on the price at which maritime shippers can deliver the goods.


In its monthly oil market report for March, the Paris-based International Energy Agency reported that sanctions are biting.

“In February, Russia’s estimated oil export revenues fell to $11.6 billion — a $2.7 billion decline from January when volumes were significantly higher, and nearly half pre-war levels,” the report read.

Crude oil exports in February declined after an embargo on refined petroleum products came into force in the European Union. At the start of 2022, the EU took in around 4 million barrels of Russian crude oil per day, though that’s now closer to 600,000 bpd, the IEA estimated.


Some sanctions are designed so that landlocked countries can still secure enough supplies to avoid an internal energy crisis. But it’s mostly China and India that continue to take in Russian supplies. The IEA said those levels also declined.

“Willing buyers in Asia, namely India and, to a lesser extent, China, have snapped up discounted crude oil cargoes, but increasing volumes on the water suggest the share of Russian oil in their import mix may be getting too big for comfort,” the IEA’s report read.

Russia, meanwhile, made a unilateral decision earlier this year to trim production by 500,000 bpd starting in March, though the IEA said that global oil supplies should be ample for at least the first half of the year.

The IEA said the overall picture shows supplies in general will outstrip demand, with global inventories of crude oil at levels not seen in more than a year. The agency expects recent range-bound trends for crude oil to continue over the long-term, though waning optimism about a post-pandemic recovery in China is creating headwinds.

“Prices fell a further $3 per barrel in March as macroeconomic worries escalated following the collapse of Silicon Valley Bank,” the IEA’s report read.


Prices collapsed further on Wednesday as fears of a banking crisis spread globally. West Texas Intermediate, the U.S. benchmark for the price of oil, is trading at its lowest level since late 2021.