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Sanctions have led to Russian Oil Revenues ‘Soaring’ says Forbes analysis 

A senior contributor to Forbes magazine has said that sanctions imposed by the United States on Russia after its invasion of Ukraine seems to have boosted oil revenues for Moscow. 

Robert Rapier. a senior contributor to Forbes, said that new data showed that “sanctions on Russia’s oil are in fact boosting Russia’s oil revenues”.

He had previously warned that sanctions would potentially reduce the available oil supply in a tight market. “If Russia could still sell all the oil it could produce to countries that refuse to abide by the sanctions, it might do well financially with an oil price spike,” he posited before the conflict began.

The data indicates that oil and gas Revenues were well ahead of projected streams, according to Rapier.

“Russia’s oil and gas revenues hit another record high in April. 1.8 trillion rubles in a single month, after 1.2 trillion in March. After only 4 months, Russia’s federal #budget has now already received 50% of the planned oil and gas revenue for 2022 (9.5 trillion),” posted Janis Kluge of the German Institute for International and Security Affairs

Rapier said the problem for those seeking to use sanctions to oppose the invasion was that the West was reliant on Russian oil.

“Although the U.S. has stopped buying Russian oil, the challenge remains that Russia is one of the largest global producers and exporters of oil. There is no way to completely remove Russian oil from the market without sending oil prices much higher — perhaps to $200 a barrel,” he wrote.

“Further, as oil prices go higher it increases the appeal of Russia’s oil. Right now, China and India, for example, have tremendous incentive to buy discounted Russian oil.”

“In other words, it is a classic catch-22. In attempting to punish Russia by keeping its oil off the market, Russia is enjoying a net benefit of higher oil revenues.”

He acknowledged that other sanctions were likely having the “desired impact” and impacting on life in Russia negatively.

“That’s not to say that other sanctions aren’t having the desired impact. By all accounts, life is becoming more difficult in Russia due to the many sanctions that have been put in place.

“But in a world that is still heavily dependent on oil, the only way to effectively impact Russia’s oil revenues is to reduce global dependence on oil,” he said.

As tensions rise between Russia and Ukraine, one of the issues being discussed a lot in the West is what a military conflict may do to oil prices.

Russia is one of the world’s largest oil producers, producing in excess of 10.1 million barrels per day of crude oil and natural gas condensate. just behind the US and ahead of Saudi Arabia.

However, as the U.S. consumes more oil than it produces, it is a net importer while Russia remains a net exporter.

European countries remain heavily reliant on Russian oil and gas, and despite EU leaders urging a complete ban on all purchases of Russian oil by the end of the year, many countries baulk at the effect on their economies.

Last month, Bloomberg reported that ten European companies had already opened the accounts at Gazprombank required to meet Russia’s demands of paying for Russian gas in roubles.

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