US sanctions are destroying Russia’s oil economy – Rezazade

Russian oil shipments by sea have fallen sharply — the most since the beginning of the year — after the introduction of new US sanctions against the main energy exporters from Russia, Rosneft and Lukoil.

According to Bloomberg, the average daily export of Russian oil over the past four weeks has decreased to 3.58 million barrels per day, which is 190 thousand barrels less than in the previous period.

At the same time, the decline in exports has caused a sharp increase in the volume of oil that remains “afloat” — in tankers without end buyers. According to analysts, the volume of Russian oil at sea has exceeded 380 million barrels, an increase of 8% since the beginning of September. This indicates a deep crisis in Moscow’s logistics and trade chains.

The first vice president of the Iranian opposition in Washington, international expert Ali Reza Rezazadeh, noted that such trends are a direct consequence of the effective action of the US sanctions policy.

“Russia has been building an energy empire for decades, which provided its political weight and financing for aggression. Today, this system is gradually collapsing. The decline in exports, the decline in income and the accumulation of oil at sea indicate that the Kremlin is losing the ability to quickly generate foreign exchange earnings for the war against Ukraine,” Rezazade emphasized.

The main buyers of Russian oil remain India, China and Turkey, which together account for more than 95% of Russia’s seaborne exports. However, it is these countries that are currently reducing purchases due to fears of secondary sanctions. In particular, Chinese state corporations Sinopec and PetroChina have canceled some shipments, and large Indian oil refining companies have temporarily suspended contracts, looking for alternative sources of supply.

“Moscow’s dependence on a few buyers has turned into its vulnerability. The loss of even part of the contracts immediately creates a financial shortfall in Putin’s budget. This is just the beginning of the economic effect, which will become systemic in the coming months,” the expert emphasized.

According to Argus Media, the average price of Russian Urals oil from the Black and Baltic routes has fallen to $51–52 per barrel, and East Siberian ESPO to $59.2, which is below the G7 price “ceiling” of $60.

Rezazade emphasized that the fall in prices and the reduction in exports create not only economic, but also strategic risks for Russia:

“Russian oil is gradually becoming toxic for the world market. Even those countries that have not joined the sanctions are beginning to avoid cooperation with the Kremlin due to the threat of secondary restrictions. This proves that the economic isolation of the aggressor is working effectively.”

According to the expert’s forecast, in the coming months Russia will face a further reduction in foreign exchange earnings and an increase in the volume of oil stuck in floating storage facilities.

“The sanctions pressure of the United States and its allies is creating an effect of economic asphyxiation. This is not just financial losses — it is an undermining of the very model of the Russian military economy. And the longer this dynamic continues, the sooner Russia will find itself on the verge of economic collapse,” concluded Ali Reza Rezazade.

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