6 ms·

It was big news this month when Russian oil exports finally made it back to prewar levels. Their revenue is still off by ~45% from prewar. The sanctions absol

It was big news this month when Russian oil exports finally made it back to prewar levels. Their revenue is still off by ~45% from prewar. The sanctions absolutely did something. Though I think it’s reasonable to ask if they caused a net increase in the cost of oil after the initial shock given how big a discount Russian oil buyers are getting. Though even if exports stabilized it’s possible the market is paying a risk premium.

somenameforme 4y ago
The point of the sanctions was to impact Russia's economy. Remember whole 'ruble is rubble' thing? The IMF expects Russia's economy to see net growth this year [1] after seeing a total decline of -2.1% last year. Their inflation rate is currently 7%, expected to hit 4.6% by the end of the year. As for oil prices, it's important to remember that oil prices before the war were very high, and they got even higher in the early parts of it. In February 21, 2022 (the invasion was on the 24th) prices were at $90/barrel. They hadn't been that high since 2014. [2] So it's easy to be somewhat misled just considering before/after scenarios. [1] - https://www.imf.org/en/Countries/RUS https://www.imf.org/en/Countries/RUS [2] - https://tradingeconomics.com/commodity/crude-oil https://tradingeconomics.com/commodity/crude-oil
- kasey_junk 4y ago
  I think it’s entirely fair to suggest the sanctions did not achieve their desired goals. I think it’s an entirely different thing to suggest it did “nothing”. Oil revenues are off 45%. Its GDP was down 2% in 2022 while the thing it exports was up. Saudi Arabia’s and the UAE GDP set a record over the same time period as a point of reference. The OECD and World Bank anticipate GDP shrinkage this year as well. The ruble is at its lowest point in 20 years (if you remove the war shock). Thats even with the heroic activity of their central bank last year and current capital flight restrictions. Their sovereign wealth fund holds 16% less today than it did before the sanctions, because its being used to backstop the currency.
- 0xDEF 4y ago
  The IMF is using the countries' own claims and numbers for their calculations. Russia's own economic numbers have been unreliable since Covid hit and blatantly cooked up since the February 2022 invasion of Ukraine. This paper gives a more correct view on the dire state of the Russian economy: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4167193 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4167193
  - thriftwy 4y ago
    That article is almost a year old now. Where's the collapse?
    - pixl97 4y ago
      In just about every one of their industries... A fair part of Russian economic 'growth' is in military supplies. When you are attacking another country and looking at almost no gains in the end this is a disaster of epic levels. If you have a gain in the end you can justify the expense in the revenue from the spoils you captured. At it's current rate Russia is looking like it will get none of that. It will not gain any new territory. It will lose massive amounts of equipment and personnel directly. It has lost massive numbers of better off people that left the country. This is a demographic and economic nightmare, that keeps getting worse when you look at the preconditions. Before the war Russia was making huge amounts selling natural resources, but was already running into problems funding its retirement (something Putin said he'd never touch when he was first elected). Well in the past few years Putin did have to raise the retirement age and tried to reduce the retirement benefits which was causing massive problems internally. Now that problem is even worse and puts Russia at risk of complete internal collapse.
      - somenameforme 4y ago
        You can take a stroll about Moscow anytime you fancy. Search a video site for something like "прогулка по москве 2023". That simply means 'a walk around Moscow 2023.' Here's [1] one from 5 days ago. One could describe what you see in many ways, but a complete economic collapse is probably not one of them. As for the war, look at the leaks; you're expected to. That's why they're not being given the Twitter Files treatment. There was a conscious decision to cover them and regularly emphasize points such as the predictions for Ukraine's counter offensive. Watch how the media narrative on Ukraine is (and will continue to) suddenly shift. We seem to be hitting that 'lab leak' "messaging" inflection point with Ukraine. The Washington Post is now even running an opinion piece suggesting NATO could bypass Ukraine and directly negotiate with Russia, making some substantial concessions, in an effort to try to end the war. [2] The problem with pensions is mostly about fertility. Like most of the developed world, Russia's fertility rate is abysmal. So you have an ever-growing group of older individuals who are supposed to be supported by an ever smaller group of younger individuals. It's the reason retirement ages are going up everywhere. Russia increased theirs from 60 to 65. In the US and Norway full retirement is 67, France just bumped theirs from 62 to 64, and so on. In low fertility countries, rich and poor alike, expect retirement age to gradually approach life expectancy. A sub-replacement fertility means there is no equilibrium point. Your youth population is constantly shrinking, and trending towards zero. Of course bloody wars aren't helping on this front. [1] - https://www.youtube.com/watch?v=9tD1crjaeYQ https://www.youtube.com/watch?v=9tD1crjaeYQ [2] - https://www.washingtonpost.com/opinions/2023/04/19/nato-could-negotiate-with-russia/ https://www.washingtonpost.com/opinions/2023/04/19/nato-coul...

somenameforme 4y ago

The point of the sanctions was to impact Russia's economy. Remember whole 'ruble is rubble' thing? The IMF expects Russia's economy to see net growth this year [1] after seeing a total decline of -2.1% last year. Their inflation rate is currently 7%, expected to hit 4.6% by the end of the year. As for oil prices, it's important to remember that oil prices before the war were very high, and they got even higher in the early parts of it. In February 21, 2022 (the invasion was on the 24th) prices were at $90/barrel. They hadn't been that high since 2014. [2] So it's easy to be somewhat misled just considering before/after scenarios. [1] - https://www.imf.org/en/Countries/RUS https://www.imf.org/en/Countries/RUS [2] - https://tradingeconomics.com/commodity/crude-oil https://tradingeconomics.com/commodity/crude-oil

kasey_junk 4y ago
I think it’s entirely fair to suggest the sanctions did not achieve their desired goals. I think it’s an entirely different thing to suggest it did “nothing”. Oil revenues are off 45%. Its GDP was down 2% in 2022 while the thing it exports was up. Saudi Arabia’s and the UAE GDP set a record over the same time period as a point of reference. The OECD and World Bank anticipate GDP shrinkage this year as well. The ruble is at its lowest point in 20 years (if you remove the war shock). Thats even with the heroic activity of their central bank last year and current capital flight restrictions. Their sovereign wealth fund holds 16% less today than it did before the sanctions, because its being used to backstop the currency.
0xDEF 4y ago
The IMF is using the countries' own claims and numbers for their calculations. Russia's own economic numbers have been unreliable since Covid hit and blatantly cooked up since the February 2022 invasion of Ukraine. This paper gives a more correct view on the dire state of the Russian economy: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4167193 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4167193
- thriftwy 4y ago
  That article is almost a year old now. Where's the collapse?
  - pixl97 4y ago
    In just about every one of their industries... A fair part of Russian economic 'growth' is in military supplies. When you are attacking another country and looking at almost no gains in the end this is a disaster of epic levels. If you have a gain in the end you can justify the expense in the revenue from the spoils you captured. At it's current rate Russia is looking like it will get none of that. It will not gain any new territory. It will lose massive amounts of equipment and personnel directly. It has lost massive numbers of better off people that left the country. This is a demographic and economic nightmare, that keeps getting worse when you look at the preconditions. Before the war Russia was making huge amounts selling natural resources, but was already running into problems funding its retirement (something Putin said he'd never touch when he was first elected). Well in the past few years Putin did have to raise the retirement age and tried to reduce the retirement benefits which was causing massive problems internally. Now that problem is even worse and puts Russia at risk of complete internal collapse.
    - somenameforme 4y ago
      You can take a stroll about Moscow anytime you fancy. Search a video site for something like "прогулка по москве 2023". That simply means 'a walk around Moscow 2023.' Here's [1] one from 5 days ago. One could describe what you see in many ways, but a complete economic collapse is probably not one of them. As for the war, look at the leaks; you're expected to. That's why they're not being given the Twitter Files treatment. There was a conscious decision to cover them and regularly emphasize points such as the predictions for Ukraine's counter offensive. Watch how the media narrative on Ukraine is (and will continue to) suddenly shift. We seem to be hitting that 'lab leak' "messaging" inflection point with Ukraine. The Washington Post is now even running an opinion piece suggesting NATO could bypass Ukraine and directly negotiate with Russia, making some substantial concessions, in an effort to try to end the war. [2] The problem with pensions is mostly about fertility. Like most of the developed world, Russia's fertility rate is abysmal. So you have an ever-growing group of older individuals who are supposed to be supported by an ever smaller group of younger individuals. It's the reason retirement ages are going up everywhere. Russia increased theirs from 60 to 65. In the US and Norway full retirement is 67, France just bumped theirs from 62 to 64, and so on. In low fertility countries, rich and poor alike, expect retirement age to gradually approach life expectancy. A sub-replacement fertility means there is no equilibrium point. Your youth population is constantly shrinking, and trending towards zero. Of course bloody wars aren't helping on this front. [1] - https://www.youtube.com/watch?v=9tD1crjaeYQ https://www.youtube.com/watch?v=9tD1crjaeYQ [2] - https://www.washingtonpost.com/opinions/2023/04/19/nato-could-negotiate-with-russia/ https://www.washingtonpost.com/opinions/2023/04/19/nato-coul...