EU imports of Russian fossil fuels accounted for 44 billion euros ($46.3 billion) from February 24, the day Russia launched its invasion, to April 24. That’s more than double the value of Russian energy imported by EU countries in the same two-month period last year, CREA lead analyst Lauri Myllyvirta told CNN.
Higher prices than volumes accounted for most of this increase.
The European Union accounted for about 70% of Russia’s global fossil fuel export earnings, which totaled 63 billion euros ($66.3 billion) over the two months.
Energy prices have risen over the past year as countries emerged from lockdowns, driving up demand. Russia’s invasion of Ukraine gave oil and gas prices a further boost. OPEC member nations have also failed to deliver promised production increases, further tightening supply.
The European Union imported 10% more Russian gas through pipelines and 20% more liquefied natural gas in the two months, but export volumes of Russian oil and coal to the EU fell by 20% and 40%, respectively.
The findings were released as Europe comes under mounting pressure to ban Russian oil imports and accelerate its move away from Russian gas in a bid to halt Kremlin enrichment and indirectly funding the war in Ukraine.
It also comes as Russian energy giant Gazprom cut off gas supplies to Poland and Bulgaria to put more pressure on European companies to pay in rubles. Russia is trying to prop up its staggering currency.
The Russian economy has been crushed by Western sanctions targeting the county’s central bank, freezing about half of the country’s $600 billion in foreign exchange reserves.
“The fact that their coffers are bulging because of unexpected gains from fossil fuel prices is a very perverse outcome,” Myllyvirta told CNN.
Rapidly phasing out Russian fossil fuels will pose a challenge for the 27-nation bloc, which before the war depended on Russia for about 40% of its natural gas imports, as well as 27% of its oil and 46% of its coal imports. An abrupt end to these purchases would have serious consequences for consumers and businesses.
It’s particularly challenging for Germany, which is the world’s largest single buyer of fossil fuels from Russia since the invasion, with purchases worth €9.1 billion, according to CREA.
Italy was the second largest customer, transferring 6.9 billion euros to Russia, followed by China, the Netherlands, Turkey and France.
The European Union has pledged to sever its dependence on Russian energy by 2027 and is working on an oil embargo that could be announced as early as next week, but the report shows the diversification measures announced so far will do little in the short term.
“Everything that has been announced in terms of green energy and energy efficiency is impressive when you look at the potential impact over the next few years,” said Myllyvirta.
“But as I said, the short-term component – which would do as much as possible to limit Russia’s revenues in the short term – was really missing.”
To reach their conclusions, CREA researchers tracked maritime deliveries using ship location data (AIS) and pipeline deliveries using data from Eurostat and the European Network of Gas Transmission System Operators.
Several European energy companies are currently in talks with Gazprom about their gas contracts. On Thursday, German company Uniper and Austrian company OMV said they believed it was possible to comply with Moscow’s new payment mechanism without clashing with EU sanctions.