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Essay: How long will the war in Ukraine last and what will its likely outcomes will be? A prediction on its outcomes (view source)
Revision as of 05:24, August 26, 2023
, 05:24, August 26, 2023→Economic effects of the war on Russia
== Economic effects of the war on Russia ==
== Economic effects of the war on Russia ==
=== Russian oil and gas revenue is down ===
'''Oil and gas are a significant part of the Russian economy. Russia is now selling oil and gas at a lower profit margin to China/India due to sanctions and Europe moving away from Russia oil/gas:'''
Oil and gas are a significant part of the Russian economy. Russia is now selling oil and gas at a lower profit margin to China/India due to sanctions and Europe moving away from Russia oil/gas. China's economy is having significant problems compared to its past. If China's economy gets worse (And there is some evidence that China's future economy will may worse this decade and beyond), that is going to hurt the Russian economy. See: [[Essay:Skepticism about China remaining a global power]]).
"Even the act of diverting supplies to Asia entails a significant reduction in Russian companies’ profit margins. It costs a lot more to transport oil to Asian markets than to Europe, and there is not much spare transport capacity, which pushes up the cost of freight, reducing the profit made by Russian companies, whatever the amount at which the price is capped.
The price cap also enables Asian buyers to obtain big discounts on Russian oil. China and India may not officially be enforcing the cap, but it’s hard to imagine that companies from those countries will not use it to barter the price down. Indeed, this is already happening: some shipments to China due to be loaded onto tankers in January were sold at $5–6 cheaper per barrel than usual."<ref>[https://carnegieendowment.org/politika/88639 Can Russia’s War Chest Withstand the New Oil Cap?]</ref>
*[https://www.reuters.com/business/energy/russian-oil-gas-budget-revenues-almost-halved-january-june-2023-07-05/ Russian oil and gas budget revenues almost halved in the first half of 2023], Reuters, 2023
[[File:Oil-barrel-black-hi.png|thumbnail|225px|center|Oil and gas are a significant part of the Russian economy.
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Russia is now selling oil and gas at a lower profit margin to China/India due to sanctions and Europe moving away from Russia oil/gas.<ref>[https://carnegieendowment.org/politika/88639 Can Russia’s War Chest Withstand the New Oil Cap?]</ref> ]]
{{Clear}}
[[File:Russian Monthly Oil Revenue from 2022 to July 2023.jpg|thumbnail|1000px|center|Russian monthly oil revenues from January 2022 to July 2023 (International Energy Agency estimates)<ref>[https://archive.md/ax8Sp#selection-4547.0-4547.60 Russia Oil Passes Price Cap as Export Revenue Hits 2023 High], Bloomberg News, August 11, 2023</ref>
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In 2023, Russian oil revenues are considerably down from 2022.<ref>[https://archive.md/ax8Sp#selection-4547.0-4547.60 Russia Oil Passes Price Cap as Export Revenue Hits 2023 High], Bloomberg News, August 11, 2023</ref>]]
==== Other major economic effects of the war in Ukraine on Russia ===
[[File:MOEX Russia Index - stock index that tracks the performance of the 50 largest and most liquid stocks across 10 sectors in Russia.png|thumbnail|center|1000px|center|The MOEX Russia Index, or IMOEX, is a stock index that tracks the performance of the 50 largest and most liquid stocks across 10 sectors in Russia.
[[File:MOEX Russia Index - stock index that tracks the performance of the 50 largest and most liquid stocks across 10 sectors in Russia.png|thumbnail|center|1000px|center|The MOEX Russia Index, or IMOEX, is a stock index that tracks the performance of the 50 largest and most liquid stocks across 10 sectors in Russia.