IEA stated that Russia's oil earnings decreased sharply as the West's price cap started to bite

March 16, 2023: On Wednesday, the International Energy Agency said Russia’s oil export revenues decreased sharply, prompted by bans and price caps designed to curtail President Vladimir Putin’s capacity to finance the war in Ukraine.

The IEA stated that Russia’s estimated oil export revenues decrease to $11.6 billion in the previous month, down $2.7 billion from January, when volumes were hugely higher.

“It remains to be seen if there will be a sufficient appetite for Russian oil products now that the cost cap is in place or if its production starting to decrease under the weight of sanctions. Earnings are already dwindling,” the group said in its latest oil market report.

The energy agency cited the Russian finance ministry, citing that Moscow’s financial receipts from oil sales were 45% of the level from a year.

The recent figures come shortly after the IEA stated in mid-February that the West’s oil war against Russia appeared to have the “intended effect” despite resilient production and exports in the last months.

Ukrainian officials and campaigners have called for Western policymakers to ramp up the fiscal pressure on Russia by aiming its oil earnings to help Kyiv prevail.

The European Union’s embargo on Russian oil products took effect on February 5, building on the $60 oil price cap implemented by the Group of Seven huge economies on December 5. The latter measure also mixed with a move by the EU and the U.K. to impose a ban on the seaborne transfer of Russian crude oil.

On Tuesday, asked whether he was concerned in the previous year that the Russian economy might have collapsed because of international sanctions, Putin stated that he had been worried but that Russia’s “economic sovereignty” recent was a significant result. The foundations of the economic stability were “stronger than anyone believed,” he added.

Putin stated that Russia’s financial system had got more robust and that Western companies that left Russia in the previous year thought the economy would collapse, “but it didn’t.”