Russia’s oil industry may finally be meeting its reckoning as the West intensifies its sanctions regime.
On Friday, Elvira Nabiullina, the governor of the Bank of Russia, said in a statement that the West’s tightening of sanctions against the country is hitting its oil export revenue.
“After the decline at the beginning of the year, exports have been rebounding, driven by the increase in oil prices,” said Nabiullina, according to an official transcript.International crude oil prices are up over 10% so far this year.
“However, secondary sanctions hinder this process,” she added, referring to trade restrictions aimed at preventing third parties outside the US or EU from doing business with Russia.
Russia’s economy has remained resilient two years into the war in Ukraine and amid trade sanctions, vexing the West.
This is in part because Russia, an energy giant, has managed to keep up with its exports by pivoting to alternative markets such as India and China.
But some Chinese banking giants have already halted payments from sanctioned Russian financial institutions, local Russian media reported in February.
Now, other global banks that Russia was using to skirt sanctions are also turning away from doing business with the country for fear of reprisals from the West, The Wall Street Journal reported last week.
Indian customers are now having a harder time as well.
Nabiullina gave a hint of how Russia would be doubling down on busting sanctions.
“Due to sanctions, there are certainly difficulties with conducting cross-border payments,” she said, per TASS state news agency. Russian banks and companies are finding new ways to make payments with countries, she said, adding that they are “quite flexible in changing these methods when difficulties increase.”