Impact of sanctions on Russian exports in 2022

The study by SBS Consulting analyses the impact of the imposed international sanctions on Russia's exports in 2022. It examines the effects of internal and external restrictions imposed on Russia and assesses the possible decline in export volumes. The study presents key conclusions and forecasts based on the analysis of current data and trends.

Features of Russia's exports in 2021

In 2021, Russian exports totalled about $492 bln, 43% of which were fossil and refined fuels. The main export destinations included the European Union (38%), Asia (27%) and North America (7%). Partner countries were led by China (14%), the Netherlands (9%) and Germany (6%).

Export structure

Main commodity categories of Russian exports in 2021:

• Fossil fuels: 28%
• Refined fuels: 15%
• Metal products: 10%
• Chemical products: 7%
• Engineering products: 5%
• Food: 6%
• Precious metals and stones: 6%
• Wood and paper products: 3%
• Other goods: 4%

Impact of sanctions on exports in 2022

The internal restrictions on exports, external sanctions from the US, EU, Australia and the UK, and the cessation of trade with Ukraine will potentially reduce Russia's exports in 2022 by $44 bln, which is 9% of the 2021 level.

Internal restrictions and their impact

Russia has imposed export restrictions on certain commodity items, resulting in a $17 bln decrease in export volumes. The main losses are expected in power engineering ($95 bln) and food ($26 bln).

Impact of cessation of trade with Ukraine

Due to the cessation of trade with Ukraine, the volume of missing exports is estimated at $7 bln.

US and EU sanctions

Russian exports will be most affected by the US and EU sanctions, which are expected to reduce exports by $20 bln. As a result of external sanctions imposed by individual countries (Australia and the UK), the reduction in exports is estimated at $4 bln.

• The EU sanctions are aimed at reducing imports from Russia of metal products ($29 bln), fossil fuels ($28 bln) and wood and paper products ($28 bln).
• The US sanctions are aimed at reducing imports from Russia of fossil fuels ($72 bln).

Estimated export growth considering price growth

Despite the restrictions imposed, Russia's exports are expected to increase by $635 bln in 2022 (13% of the 2021 level), driven by higher prices for export commodities. The main projected losses are $561 bln, including internal restrictions, external sanctions and the cessation of trade with Ukraine.

Calculation methodology

The methodology for calculating the volume of exports for 2022 included determining the volume of missing exports, taking into account the sanctions, in 2021 prices. For this purpose, Rosstat data and trade maps were used, as well as producer price indices and stock exchange prices for respective goods.

Conclusion

The imposition of sanctions in 2022 has a significant impact on Russia's exports, leading to a decline in export volumes to key regions and product categories. However, the increase in prices for export goods may partially compensate for these losses, contributing to an increase in total exports. The situation depends on the dynamics of international relations and possible changes in the sanctions policy. Key findings:

• Russian exports in 2021 totalled $492 bln, dominated by the fuel sector.
• The 2022 sanctions will reduce exports by $44 bln, which is 9% of the 2021 level.
• The main losses by product category are engineering products and food.
• US and EU sanctions will have the biggest impact, reducing exports by $20 bln.
• Exports are projected to increase by 13% in 2022 due to higher prices for export commodities.