Assessing the Impact of International Sanctions on Russian Oil Exports

Mironov, Maxim; Babina, Tania; Hilgenstock, Benjamin; Itskhoki, Oleg; Ribakova, Elina

Publication:
Assessing the Impact of International Sanctions on Russian Oil Exports

dc.contributor.author	Mironov, Maxim
dc.contributor.author	Babina, Tania
dc.contributor.author	Hilgenstock, Benjamin
dc.contributor.author	Itskhoki, Oleg
dc.contributor.author	Ribakova, Elina
dc.contributor.ror	https://ror.org/02jjdwm75
dc.date.accessioned	2025-04-01T14:17:42Z
dc.date.available	2025-04-01T14:17:42Z
dc.date.issued	2023-02-23
dc.description.abstract	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.
dc.description.peerreviewed	yes
dc.description.status	Published
dc.format	application/pdf
dc.identifier.citation	Babina, Tania and Hilgenstock, Benjamin and Itskhoki, Oleg and Mironov, Maxim and Ribakova, Elina, Assessing the Impact of International Sanctions on Russian Oil Exports (February 23, 2023). http://dx.doi.org/10.2139/ssrn.4366337
dc.identifier.doi	http://dx.doi.org/10.2139/ssrn.4366337
dc.identifier.uri	https://hdl.handle.net/20.500.14417/3687
dc.language.iso	en
dc.publisher	SSRN
dc.relation.department	Finance
dc.relation.entity	IE University
dc.relation.school	IE Business School
dc.rights	Attribution-NonCommercial-NoDerivatives 4.0 International
dc.rights.accessRights	info:eu-repo/semantics/openAccess
dc.rights.uri	https://creativecommons.org/licenses/by-nc-nd/4.0/deed.en
dc.subject.keyword	Russia Invasion of Ukraine
dc.subject.keyword	Russian Oil Exports
dc.subject.keyword	Sanctions
dc.title	Assessing the Impact of International Sanctions on Russian Oil Exports
dc.type	info:eu-repo/semantics/workingPaper
dc.version.type	info:eu-repo/semantics/publishedVersion
dspace.entity.type	Publication
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