The International Energy Agency (IEA) has recently evaluated the results of the EU decision to implement an embargo on Russian oil products. According to Toril Bosoni, head of the oil industry and markets division at the IEA, sanctions targeting Russian oil are having the “intended effect” despite surprisingly resilient production and exports in recent months. However, real numbers show that price restrictions may not be as effective as expected. For instance, Russian net oil output decreased by only 160,000 barrels a day from pre-war levels in January. Bosoni explained that Moscow was able to redirect much of its crude imports to new markets in Asia. Thus, growing exports of Russian crude to China, India, and Turkey have partially offset the loss of revenue that was coming from the European market. The IEA’s official also noted that the price cap was not intended to eliminate Russian oil from the market. On the contrary, it was designed to keep cheap Russian oil flowing into global markets while reducing the Kremlin's earnings from crude sales. The restrictive mechanism has been in place for only three months and it has already hurt Russia’s budget. Thus, in January, its tax revenues from the oil industry went down by 48% year-on-year while export revenues dropped by 36% from a year ago.
