Slovakia paid Russia like no one else in the EU. In December alone, 316 million euros were spent on Russian fuels

More than one billion euros per day to the Russian state budget. This was the reality two years ago from the sale of Russian fossil fuels. Western sanctions as a result of Russian aggression in Ukraine mean that Russia is losing hundreds of millions of euros every day.

December 2023 was even the second worst month for Russia and its sales revenue since the beginning of the Russian invasion. Russia collected only 640 million euros from the sale. Thus, the Kremlin loses roughly 380 million euros per day, according to data from the Center for Research in Energy and Clean Air (CREA).

These data also clearly prove that Western sanctions are working. If Russia had not partially bypassed them, the impact on the budget would have been even harder. This is also why the European Union already approved measures in its 12th sanctions package at the end of last year that will make it more difficult to circumvent EU sanctions. The package of sanctions, for example, includes the strengthening of bilateral and multilateral cooperation with third countries, with the aim of preventing the circumvention of sanctions, or stricter enforcement of the price ceiling for oil. The Eurocommission announced that, thanks to the new measures, the sale of tankers to third countries will be more thoroughly monitored and their certification will be required in more detail.

In the past, it happened that Russia circumvented the price ceiling with the help of a “shadow fleet of tankers”. Russian oil was also pumped from tanker to tanker at sea, making it impossible to trace its true origin. Last but not least, Russian oil was processed, for example, in Indian refineries and later reached the European market without problems as non-Russian oil products. Such circumvention of Western sanctions is still used today.

The Russian budget is mainly kept afloat by oil

Russia had the most income, i.e. more than 1.2 billion euros per day, thanks to the export of fossil fuels in March 2022. It also benefited, for example, from the unfavorable situation on the markets, when the price of gas was at the level of approximately 90 euros per megawatt hour. For comparison, before the invasion it was around 15 euros and currently it is 33 euros for the same amount. Europe was the main consumer of Russian gas. Russia had higher incomes thanks to higher prices of oil and petroleum fuels.

However, Europe began to gradually replace Russian gas with alternative supplies and at the end of 2022 imposed sanctions on Russian oil. Gradually, it was seen how Russia’s income from the sale of fuels gradually began to decline continuously from its peak in the spring of 2022. As a result, Russia has 380 million euros less revenue from fuel sales per day than it had in the times of maximum primes, data for December show.

“Before the pandemic, the energy crisis and the war in Ukraine, Russia covered 28 percent of oil imports and 45 percent of natural gas imports to the EU. Now these shares have fallen to 18 and 16 percent,” state analysts from the Institute for Strategies and Analysis report. They came to the conclusion that Western sanctions on Russian fossil fuels have a greater impact than it might seem at first glance.

They also looked at what accounted for the bulk of December’s revenue decline. Pipeline natural gas accounted for the largest share of this decline, where Russia lost 130 million euros per day, followed by oil transported by tankers, where revenues fell by 80 million euros per day, and last but not least, Russian petroleum fuels, where revenues fell by 70 million euros per day.

Currently, the sale of oil products accounts for up to 30 percent of the income from Russian fuels. This is followed by the sale of oil, whether transported by tankers or pipelines. Right behind them are revenues from the sale of gas and liquefied gas. Coal has the smallest share, accounting for only almost five percent of revenues.

Slovakia tops the list

Analysts from CREA also took a closer look at which member states Russian fuel supplies flow to the most. Data for December showed that Slovakia became the largest importer of Russian fossil fuels in the EU. We paid up to 316 million euros for fuel this month. The import of oil through pipelines amounted to 189 million euros and gas to the level of 127 million euros.

Even in October and November last year, Hungary dominated the ranking. However, the situation turned around in December and Slovakia reached the first place. Next is Belgium, which bought Russian liquefied gas (LNG) for a little over 300 million euros in December. The third place was occupied by Spain, which in December imported LNG worth 288 million euros from Russia. The Bulgarians came fourth, importing Russian fuels for 275 million euros. The Czech Republic was the fifth largest importer of Russian fossil fuels to the EU in December, importing 117 million euros worth of oil and 140 million euros worth of pipeline gas.

Energy analyst Radovan Potočár from the portal points out that data on oil and gas imports from Russia fluctuate significantly between individual months, for two reasons. “The first reason is that the different amounts of raw materials that pass through the pipeline, or gas pipeline. For example, at the Veľké Kapušany – Uzhhorod gas point, where Russian gas flows to Slovakia, there are, unlike in the past, large fluctuations and supplies are fluctuating. The second and perhaps even more important factor is the fluctuation of oil and gas prices. If prices on the stock exchanges rise, the volume of imports expressed in euros will also rise, although there may not have been more cubic meters of gas or tons of oil,” he says for Pravda. According to him, it is not the case that Russian gas is miraculously cheaper than gas from other sources. Even the contract which has Slovakia with Gazprom, it is structured in such a way that Gazprom takes into account the price development on the stock exchange in the previous month when invoicing.

Although Slovakia is at the top of the list, it must be remembered that there is also circumvention of sanctions. This may result in the fact that the import of Russian fuels to other member countries is greater. However, these data are no longer recorded in the statistics. If Russian oil is imported and processed in India, for example, the oil products produced there and imported to Europe are recorded in the statistics as originating in India.

The situation is also different if we look at who are the largest importers of fuels from Russia as of January 2023. Slovakia ranked 12th globally.

Replacing Europe is not easy

Two years ago, just before the start of the invasion, up to 63 percent of Russia’s revenues from fuel sales went to the European Union. Today it is only 13 percent. Russia redirected its oil and gas supplies to China, India and Turkey. In the case of China, two years ago the export was at the level of ten percent, today it is already 38 percent. Before the war in Ukraine, no Russian fuel flowed to India, today the export is up to 14 percent. These data also clearly prove that Russia has lost Europe as an important customer for its fossil fuels. Asian countries took advantage of the situation and buy Russian fuel at a significant discount. If Russia wants to keep its export markets, it must accept lower prices.

Most of Russian oil is currently bought by China (45%) and India (33%). On the contrary, the EU buys only seven percent. Even before the invasion, oil exports to the EU were at the level of 50 percent. It is similar in the case of gas supplies. As recently as 2021, the EU imported up to 45.4 percent of all gas supplies from Russia, today it is only 14.5 percent. The last functional routes lead Russian gas to Europe through a pipeline in Slovakia and through the Turkstream gas pipeline.

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