Sanctions and a mysteriously erupted underwater gas pipeline have led to a dramatic decrease in trade between the European Union and Russia. In June, trade between the two fell by 10% to €4.9 billion, marking a low not seen since September 1999, when trade fell to €4.6 billion.
Russia continues to export gas (1.1 billion euros), oil (333 million euros), as well as iron and steel (164 million) to the EU. Overall, Russian goods to the EU fell 14% in June on a monthly basis to 2.5 billion euros, the lowest level since February 1999.
European products received by Russia declined 5% on a monthly basis to 2.4 billion euros. Russia still relies on the EU for pharmaceuticals (634 million euros), equipment( 262 million euros), and optical instruments (203 million euros).
Sanctions do not eliminate demand. When we look at neighboring OR neutral nations, we see a dramatic increase in trade. The EU in particular is buying Russian goods from third-parties at a mark up. Russia’s trade with Romania and Bulgaria increased by 15%, for example.
The main thing here is that Russia is lush with natural resources and fossil fuels. There are not many alternatives for Europe in terms of fossil fuels, especially since America lost its energy independence under the Biden Administration. The demand for Russian fuel has not waned so Western nations are simply forced to purchase the same exact product from a third party. Russia has effectively been selling oil to nations like India who then turn around and sell it to the West at a premium
Russia does not need to adhere to the G7 nation’s price capping regulations. Pettiness is poor business, and simply attempting to ostracize a necessary trade partner from the global market has backfired in a major way. Now nations like those under BRICS are trading freely without Western interference and it is becoming overtly apparent that sanctions do not work. Is it any wonder that Turkey wants to join the BRICS alliance despite its alignment with NATO?
Money is power. Some wiser world leaders will oppose the one-world method of agreeing to collectively embark on poor economic policies to benefit the greater good of the alliance. Hence why nations like China and India have not bought into the climate change policies set by a greater authority. The nations who chose to invade Russia through a proxy war in Ukraine have made a terrible financial decision that will significantly harm their economies for years to come.
