Despite Western attempts to stifle Russia’s economy through sanctions following its invasion of Ukraine last year, Russian trade volumes with dozens of countries have actually increased since the war began — with NATO member Turkey providing a “critical” economic lifeline for Moscow, according to an analysis by the Washington-based Atlantic Council.
The countries that have increased trade since the February 2022 invasion include several European Union and NATO members, according to the analysis.
“Such surges in trade, however, are not necessarily an indicator of support” for the war launched by Russian President Vladimir Putin, the report says. “Instead, it is more likely they are predominantly the result of companies — and countries — pursuing legal opportunities for cheaper exports and new gaps in the Russian market.”
It notes that China’s trade with Russia had already been increasing at an average annual rate of 23% over the past five years, excluding the impact of the COVID-19 pandemic in 2020. It said China’s trade with Russia has jumped by another 27% since the Ukraine invasion.
Other countries have seen a far greater increase in trade with Russia since February 2022.
“We see increases of trade across a range of different countries, with places like India and Greece, for example, importing cheap Russian oil at below market prices. And this is what's causing the surge of trade there,” said Niels Graham, a co-author of the Atlantic Council report, in an interview this week with VOA.
“But we also see other countries like Turkey, for example, exporting a lot of electronics as well as chemical industrial goods to Russia to take advantage of the holes in the Russian market that have been caused by the sort of G7 statecraft response,” he said.
He said that Beijing is actually showing signs of “restraint” since Moscow’s invasion of Ukraine.
“China is certainly engaging with Russia, certainly increasing its trade overall, but doing so very much in line overwhelmingly with the red lines the West has drawn — for fear of Western retaliation against China, cutting it off from a much more important Western market,” Graham told VOA.
India’s trade with Russia has soared by 250% since 2021, the biggest increase by far among Russia’s trading partners.
China and India imported record volumes of Russian oil in May, according to Reuters, totaling about 110 million barrels for the month. Analysts say the world’s two biggest buyers of Russian oil are capitalizing on discounted prices after the G7 group of rich nations imposed a price cap of $60 per barrel in December.
Washington has warned that Moscow is seeking to circumvent the price cap by using the Eastern Siberia Pacific Ocean pipeline along with ports in eastern Russia, where there may be less Western oversight of trading activities.
The West never intended to completely block Russia oil sales, said Graham.
“Doing so against an oil producer as large as Russia would have skyrocketed global oil prices, would have likely tipped the global economy into recession, and would have made a lot of countries angry against Western actions,” he said.
The Atlantic Council report says NATO member Turkey also provides a vital lifeline for Russia’s economy, with trade volumes increasing by some 93% since the invasion.
It said Turkey has sold Russia sensitive material like integrated circuits and semiconductors which could be used in weapons systems.
“Although Turkish exports of electronic machinery, including critical integrated circuits, fell in the immediate aftermath of Russia’s full-scale invasion, they have since recovered and grown well beyond the pre-invasion average. From March 2022 to March 2023, Turkish electronic exports to Russia jumped by about 85%,” the Atlantic Council report said.
“To Ankara’s credit, following pressure from the Group of Seven [G7], Turkey has agreed to halt its transit of sanctioned goods to Russia,” the report added. “However, its trade with Russia remains a vital economic lifeline for its businesses as the country recovers and reconstructs from a devastating earthquake earlier this year.”
Turkey assured the European Union in March that it would no longer ship or transit goods to Russia that are subject to sanctions or export controls, according to an EU official quoted by Reuters.
Ankara has denied exporting goods to Russia that could have military applications.