So far, Russia has weathered the storm of sanctions better than expected. Russia's economy has benefited from high oil prices and a growing energy market. Take, for example, China. In May 2022, Russia became Europe’s leading exporter to China, ahead of Germany, the world’s third-largest exporter. Since the beginning of the invasion, Russia has increased its exports of fossil fuels to China by ↑ $3.31B (67.3%), reaching $8.21B in one month.
At the same time, China’s imports from Ukraine have dropped by ↓ -$627M (-88.5%). In May, Ukraine became the lowest exporter to China among European countries.
Although China is the most dramatic case, this is a repeated story: leading trading nations have found it challenging to do business with a country at war -unless you buy its oil and gas
In April, South Korea (↑ $70.8M, 5.58%) and Japan (↑ $93.4M, 8.53%) also increased oil and gas imports from Russia. Although South Korea started to cut its crude oil imports (↓ -$510M, -86.7%) in May, it increased its coal imports to $480M, a boost of ↑ $116M (31.8%) since the beginning of the war.
Even the U.S. could not stop buying $1.2B in refined oil from Russia in April, a drop of -$427M, -24.7%, compared to April 2021. In contrast, the U.S. imported only $75.4M from Ukraine (↓ -$50.8M, -40.3%) during the same period.
High energy prices have also benefited other countries. For example, in April, the U.S. surpassed $33B in fossil fuels exports, an increase of $1.75B (5.49%) compared to the previous month, while Norway grew its mineral fuels exports in May to $14.6B, a $1.58B or 12.2% increase between February and May 2022.
Months after the G7 and European Union launched a trade war against Russia, things were are going according to plan. In the trade war, Russia is winning. The invasion of Ukraine has driven up the cost of fossil fuels, increasing Russia’s trade balance. As a result, in the first four months of 2022, Russia ran a surplus of $95.8B, up from $27.5B in the same period last year, boosting its finances to continue its war efforts.