KSE Institute has presented the Russian Sanctions Digest for November 2023. The digest provides an overview of the latest key research projects by KSE Institute, including the Russia Chartbook, Russian Oil Tracker, Price Cap Report, and SelfSanctions/LeaveRussia.

Russia Chartbook. The external environment is improving, driven by higher oil exports (~$18 bn in September and October), lifting the trade surplus to $14-15 bn/month and the current account balance to ~$11 bn/month. The ruble faces less pressure, stabilized by external factors, CBR’s interest rate hikes, and capital controls’ reintroduction. Fiscal challenges ease with higher oil revenues, reducing the budget deficit for January-October to 1.2 trillion (42% of the full-year plan). Supported by war spending, the economy rebounds, with forecasts expecting robust growth of 1-2% this year and next.

Russian Oil Tracker. Russia reduced its dependence on Western maritime services for seaborne oil exports in Q3 2023. Only 42% of exports relied on tankers with P&I Club insurance, a decrease from 54% in Q2 2023. The use of the shadow fleet is a concern, with 178 loaded Russian shadow fleet tankers in August 2023, 72% being over 15 years old, posing environmental risks. Effective sanctions enforcement is crucial; weak implementation could lead to Russian oil revenues of $184 bn and $202 bn in 2023 and 2024, respectively.

Price Cap Report. The price cap is losing effectiveness, as over 99% of Russian seaborne crude was sold above $60/barrel in October, and nearly 30% was shipped with G7/EU service providers. Bold action is needed to maintain pressure, addressing price cap violations and curbing the growth of the shadow fleet.

SelfSanctions/LeaveRussia. 297 companies (8.2% of the total entries) have completely ceased operations in Russia. 1221 (33.8%) foreign businesses employing 341.2K people, generating annual revenues of $65.7 bn, and owning assets of $112.3 bn have curtailed operations in Russia or announced their intention to leave the country. 1551 (42.9%) foreign companies have no plans to leave the Russian market. 548 (15.2%) businesses have reduced their current operations, suspended new investments, and continue to wait.

These are the key findings that cover only a part of the digest. To subscribe to new, full issues of KSE Institute digests, please fill out the special form here: https://bit.ly/472Vu9Z.

The Digest was prepared with the support of the European Union and includes the results of research conducted by the Kyiv School of Economics, which was made possible by the support of the UK Government (UK Aid), the United States Agency for International Development (USAID), the International Renaissance Foundation and the World Bank.