Russia makes billions selling oil and gas to Germany

Germany paid Russia more than €12 billion for fossil fuels and remained Moscow’s largest client for natural gas over the first hundred days of the war in Ukraine, an analysis has found.

Over the same period the European Union bought more than 60 per cent of Russia’s hydrocarbon exports, which in turn typically make up almost 50 per cent of the Kremlin’s state revenues.

While the EU has imposed a gradual embargo on most Russian oil imports and is trying to scale back its reliance on gas from Russia, high international energy prices and greater demand from China and India mean Moscow’s revenue is predicted to increase as much as €14 billion this year. In total they have amounted to about €93 billion since February 24.

As a result the income stream from these fossil fuel exports comfortably exceeds the €840 million President Putin is spending on his invasion of Ukraine each day, according to the Centre for Research on Energy and Clean Air (CREA), a think tank based in Helsinki.

Since the start of the war Russia has continued to supply the EU with 85 per cent of its pipeline gas, 75 per cent of its liquefied natural gas and 50 per cent of its crude oil, the researchers said.

Putin’s main customer in the bloc is Germany, which is struggling to unwind three decades of growing dependence on Russian oil and gas.

Berlin has effectively cancelled the Nord Stream 2 pipeline from Russia and hopes to wholly replace its Russian oil imports over the next few months. However, it does not expect to achieve independence from Russian gas until 2024 at the earliest.

Although Germany’s gas imports from Russia fell 31 per cent in terms of volume over the first 100 days of the war, it still handed the Kremlin about €7.5 billion for the fuel, more than any other country.

At the same time France’s Russian energy imports grew, including at least 12 shipments of liquefied natural gas (LNG), crude oil and other oil products worth a combined €900 million. Overall it spent €4.3 billion on hydrocarbons from Russia.

Other European countries, particularly in the east, substantially curbed their acquisitions, either by unilaterally giving up Russian gas supplies or by being cut off for refusing to pay their bills in roubles. Lithuania’s imports fell 78 per cent from February to May, and Poland’s and Estonia’s both dropped by 51 per cent.

The CREA study also drew attention to the way India is moving into the market for Russian oil, attracted by steep discounts.

While its €3.4 billion in payments to Moscow were relatively modest by the standards of Germany and China, it bought 18 per cent of Russia’s crude oil exports, which were overwhelmingly delivered by European-flagged tankers.