Browsing by Author "Babina, Tania"

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    Assessing the Impact of International Sanctions on Russian Oil Exports
    (SSRN, 2023-02-23) Mironov, Maxim; Babina, Tania; Hilgenstock, Benjamin; Itskhoki, Oleg; Ribakova, Elina; https://ror.org/02jjdwm75
    We use a unique high-frequency Russian customs dataset to evaluate the impact of international sanctions on Russia – focusing on Russian crude oil and oil products exports, as they are the key sources of export earnings and government revenues. We study the effects of two focal sanctions measures – the EU embargo and G7 price cap on Russian seaborne crude oil, which both took effect on December 5, 2022. We find that Russia was able to redirect crude oil exports from Europe to alternative markets such as India, China, and Turkey but that export earnings were curbed substantially by the sizable discounts that Russian exporters had to accept in market segments where the impeding EU embargo lowered demand, e.g., exports from Baltic Sea ports – a dynamic that only became more pronounced after the embargo and price cap’s taking effect. However, we do not find crude oil discounts as large as those reflected in Urals prices towards the end of 2022. In particular, prices in market segments that are unaffected by lower European demand, e.g., exports from Russia’s Pacific Ocean ports, have not dropped in a meaningful way and shipments do not appear to comply with the price cap. What the EU embargo and G7 price cap have, thus, triggered is a fundamental fragmentation of the market for Russian crude oil. Based on our analysis, we conclude that a central focus of policy going forward should be the enforcement of existing sanctions on Russian oil – along with the lowering of the oil price cap. As far as oil products are concerned, we show that it is significantly less feasible to redirect exports away from the European market. This suggests that the EU embargo on oil products, which took effect on February 5, 2023, will prove to be a powerful additional tool to further curb Russian export and fiscal revenues.
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    Russian Oil Exports Under International Sanctions
    (SSRN, 2023-05-09) Mironov, Maxim; Hilgenstock, Benjamin; Shapoval, Nataliia; Ribakova, Elina; Babina, Tania; Itskhoki, Oleg; https://ror.org/02jjdwm75
    We use a unique, comprehensive transactions-level dataset on Russian exports to evaluate the impact of international sanctions—focusing on crude oil and oil products. Relying on data through the first quarter of 2023, we find that the sanctions coalition’s strategy to keep Russian oil on the global market, while restricting the country’s export earnings and fiscal revenues, is showing results. Importantly, global oil prices did not increase since the taking-effect of the EU embargo on crude oil on December 5, 2022—a key concern of some coalition governments. Rather, discounts on Russian crude oil exports widened considerably in segments of the market, where demand conditions changed due to the exit of European buyers. Russian crude oil and oil product exports, in value terms, fell by $15.6 billion in 2023Q1 vs. 2022Q4 and account for 40% of the total decline in goods exports. We estimate contributions of 6.1 billion from smaller volumes, $4.2 billion from lower global prices, as well as $5.2 billion from wider discounts. At the same time, 2023Q1 budget revenues from hydrocarbons came in 47% below the previous quarter. Even so, our findings also point to violations of the price cap and underscore the urgent need for more rigorous enforcement. Specifically, export prices at the critical Pacific Ocean port of Kozmino stood at around $73/barrel in 2023Q1—with 96% of volumes sold above the $60/barrel threshold—, while a substantial share of shipments continues to involve Western-owned or –insured vessels. Based on our analysis, we conclude that a critical focus of sanctions policy going forward should be the enforcement of existing sanctions on Russian oil.