Tighter sanctions that undercut Russian countermeasures can slash Kremlin revenues by 20% annually
CORRIGENDUM, 10 APRIL 2025 – The initial report published on 24 February 2025 projected Russia’s average annual earnings to be EUR 257 bn. The correct figure is EUR 237 bn. This error was due to us using the USD value but labelling it in EUR. The subsequent change means that the impact of further sanctions is no longer estimated to be 20%. Accounting for the corrected figure means Russian revenues will be slashed by 22%.
These changes are reflected in the strapline of the report; the ‘Key findings’; the ‘Policy recommendations: Stronger sanctions can slash Russian revenues by EUR 51 bn annually’; and ‘Figure 16’.
This change does not in any way impact the overall message of the report itself. We regret the error.
Sanctions are not just a policy tool; they are a strategic necessity. Now is the time to keep calm and carry on—holding firm against pressure to lift them. Easing sanctions prematurely would only strengthen authoritarian regimes and undermine the very principles we seek to uphold. Persistence is key to real impact.
Rasa Juknevičienė, MEP, EPP Group
Despite a range of sanctions and the threat posed by dependence on Russian energy, in the third year of Russia’s full-scale invasion of Ukraine, EU imports of Russian fossil fuels in particular remain largely unchanged, totalling EUR 21.9 bn, a 6% year-on-year drop in value but merely a 1% year-on-year drop in volumes.
Notably, EU imports of Russian fossil fuels in the third year of the invasion surpassed the EUR 18.7 bn of financial aid they sent to Ukraine in 2024.
Russia’s total global fossil fuel earnings in the third year of the invasion also reached EUR 242 bn and have totalled EUR 847 bn since the start of the invasion of Ukraine in February 2022.
Russia’s stronghold over new markets also solidified in the third year of the invasion. The three biggest buyers of Russian fossil fuels, China (EUR 78 bn), India (EUR 49 bn), and Turkey (EUR 34 bn) were responsible for 74% of Russia’s total revenues from fossil fuels in the third year of the invasion. The value of India and Turkey’s imports saw a year-on-year increase of 8% and 6% respectively.
In the third year of the invasion, Russia’s ‘shadow’ vessels also continue to reroute embargoed oil to non-sanctioning countries. 558 Russian ‘shadow’ tankers transported 167 mn tonnes, or 61%, of its total seaborne oil exports, valued at EUR 83 bn. The fleet handled 78% of Russian seaborne crude oil shipments, worth EUR 57 bn, and 37% of refined oil products, valued at EUR 26 bn.
Key findings
- In the third year of the invasion, Russia earned EUR 242 bn from global fossil fuel exports, a 3% year-on-year-drop; EUR 104 bn from crude oil, EUR 75 bn from oil products, EUR 40 bn from gas and EUR 23 bn from coal.
- Despite a host of sanctions, Russian revenues in the third year have dropped by a mere 8% compared to the year prior to the invasion of Ukraine. Since the invasion, Russia has earned an estimated EUR 847 bn from fossil fuels exports globally.
- The EU paid EUR 21.9 bn for Russian fossil fuel imports in the third year of the invasion, a mere 1% year-on-year reduction in volume. The EU’s Russian imports in the third year of the invasion surpassed the EUR 18.7 bn of financial aid sent to Ukraine in 2024.
- The effect of sanctions on Russian Urals grade crude was 70% lower in the third year than the year prior, with sanctions slashing revenues by 6%, totalling EUR 2.6 bn. This is mainly due to Russia’s increased use of ‘shadow’ tankers to transport oil to its new markets, enabling it to bypass the oil price cap.
- Russia relied on 558 Russian ‘shadow’ vessels to transport 61% of its total seaborne oil exports, valued at EUR 83 bn in the third year of the invasion.
- Despite a range of sanctions, EU Member States spent EUR 7 bn on Russian LNG in the third year of the invasion, with volumes rising by 9% year-on-year.
- G7+ countries imported EUR 18 bn worth of oil products from six refineries in India and Turkey of which an estimated EUR 9 bn was refined from Russian crude. Their imports of oil products made from Russian crude generated an estimated EUR 4 bn in tax revenues for Russia.
- Stronger sanctions countering Russian circumventions and targeted towards growing revenue streams can slash Russian fossil fuel export revenues by EUR 51 bn annually, effectively cutting earnings by 20%.
CREA’s analysis finds that tighter sanctions can slash Kremlin revenues by more than EUR 50 billion annually (20%).
Since the beginning of the war in Ukraine, Europe has made significant progress in terms of energy independence. Imports of Russian oil and gas have decreased substantially, with gas imports dropping from 45% in 2021 to 18% in 2024. However, a quarter of Russia’s fossil fuel export revenues still come from Europe. CREA’s report shows us possible pathways to further weaken Russia’s ability to turn fossil fuels into a source of funding for its war. Now more than ever is the time for Europe to eliminate completely any dependence on Russian fossil fuels, while heavily investing in energy efficiency and renewable energy sources, at home and abroad.
Thomas Pellerin-Carlin, MEP, S&D
