Russia's economy has been dealt yet another devastating blow as its most precious exports are being hammered. The vast country is home to many natural resources, such as oil, natural gas, coal, timber, gold, and diamonds. However, sales of these commodities have been "sharply declining", an expert has warned.
Vadim Shtepa at The Jamestown Foundation said Russia's many moneymakers have been sorely affected by the war in Ukraine for the last 50 years. He wrote for the think tank: "Profits from natural resource exports, Russia’s primary source of income since at least the 1970s, are sharply declining." Mr Shtepa explained that stringent economic sanctions imposed by the West, as well as increased competition from countries like China, have heavily impacted Russia's natural resources.
He continued: "This decline is not solely due to European sanctions. The Kremlin’s 'strategic partnership' with the People’s Republic of China (PRC) has not eased competition on the export market.
"For example, PRC coal is cheaper than Russian coal, and the coal-rich Russian Kuzbass/Kuznetsk Basin would have to set prices below cost to export to the PRC.
"The Russian Republic of Karelia used to send trains of timber to its neighboring country, Finland, but EU sanctions have halted this.
"The PRC is interested in Russia’s timber, but the cost of transportation through the gigantic Eurasian space makes Karelian timber prices 'golden'."
This comes after Russian fuel exports approached their lowest level since 2020 following Ukraine's drone strikes against oil refineries.
The strikes disrupted more than one million barrels a day of Russia's refining capacity, research group Energy Aspects has reported.
Since the beginning of August, 16 of Russia's 38 refineries have been hit, including one of Russia's largest 340,000 barrel-a-day plant at Ryazan near Moscow.
If they maintain the current rate, diesel exports are predicted to fall to their lowest monthly total in September since 2020, according to both OilX and Vortexa, which track cargoes.
