Topic: The effect of the 100 day war on Russia economically (Read 247 times)

Judging by information from traders, Russian Ural oil and blends are sold at a very significant discount, and the real price of transactions with China is somewhere in the region of $40 per barrel. I won’t say about India, I don’t have data, but I don’t think it’s very different - Russia needs a currency, and China always sets its own conditions, and Russia always fulfills them. Given the pragmatism of China and internal problems in the economy, I do not think that China will buy oil "at a high price". So the sanctions are giving a result, the flow of currency into the Russian Federation is declining.

This dependence on crude oil from Russia is indeed quite difficult to avoid. This is because the position of crude oil has become a reference for other countries to continue to produce the food needs of their citizens. Inevitably there will be countries that succumb to the sustainability of their country's economic stability. We are indeed forced not to interfere and continue to run the oil business in order to keep it running according to Russia wishes. There was a big war, not only from a military point of view, crude oil production became the basis for hitting western countries that opposed Russia. This will continue until one of his biggest enemies raises his hand and accepts Russia policy of importing crude oil to restore the ruble's strength.

That's interesting, I hadn't investigated how much they export to Asian countries, but they are certainly taking advantage of discounted oil. If I remember correctly, the discounted price is at least 20% lower than it's actually trading. With prices only expected to rise, it's actually quite reasonable to opt for discounted oil.

They don't, but it's being bought at discounted prices. On the one hand, I can't blame them for doing so, but on the other hand, they're funding Putin/Russia, the country who started the war in the first place and drove us to this condition.

I do not think that Russia uses cryptocurrencies to circumvent sanctions (although, of course, I could be wrong). 

According to businessman Chichvarkin, after February 24, 2022, 4,000,000 people emigrated from Russia.  Educated and wealthy people emigrated (bankers, entrepreneurs, programmers, journalists). 

At this time, currency restrictions on the movement of capital were introduced.  Therefore, many used cryptocurrencies (in particular, bitcoin) to transfer their capital abroad. 

Also, many young Russians leave Russia in winter for warmer countries (for example, Goa).  In the spring, these people faced such a problem as blocking bank cards (Visa and Master).  To make payments, they used financial schemes with cryptocurrencies (bitcoin and stablecoin). 

All this had a positive impact on the cryptocurrency market. 

Cryptocurrencies began to be used not only for speculation, but also for real financial transactions.

You build all your assumptions on an initially false premise, so you draw the wrong conclusions.

As a result of the war, Ukraine and Russia suffered alot. Due to the support from the world countries Ukraine have made themselves strong. On the other side Russia have played a tactical game. As Russia is a big exporter of oil and gas, they were able to make ruble strong even when the European countries made sanctions. During the same time period the cryptomarket boomed as Ukraine started to receive donations in the form of cryptocurrency and Russia used it as a tool to overcome the sanctions. We've been experiencing massive food inflation as the major exporters of wheat weren't able to do business amidst the war. The 100 day war on Russia have made a big impact in the world through different means.

Asia (India and China) does not really need Russian oil (and natural gas) ...

They will buy it if the prices are attractive for buying, but in fact they do not really need Russian oil.  This is due to the availability of alternative sources of energy resources and the structure of the economies of these countries, as well as to a warmer climate.  

The main consumers of Russian gas and oil are European countries.  Therefore, the conflict with European countries is a very stupid and insane action.  Currently, Russia receives a lot of money from the sale of oil and gas (due to rising world energy prices).  

However, in such a business, the main thing is to maximize the supply of goods.  The most important thing here is the struggle for the volume of the market.  

This is what affects Russia's income in the long run.

Exactly. Out of the 8 million barrels of crude and refined products that Russia export every day, now China and India together account for more than 3 million. And this figure may increase further. The Indian government is in talks with Russian counterparts for further discounts to the imports and Chinese government has announced that they are looking forward to fill their strategic oil reserves with Russian crude. On top of that, a large number of Asian nations (Sri Lanka, Pakistan.etc) have expressed interest in Russian crude.

They do not care because people support them in their decision. Those who are screaming and blaming govt and politicians for the high price of gas, oil, and food also support sanctions on Russia. The only way the world can be saved is by lifting all the sanctions on Russia and solving all the matters with negotiation. Europe should not dance with every command of the USA. They saw the USA only caring about their own interest.

The USA wants to continue this war because now they have a chance to weaken Russia and earn money by selling arms to Ukraine and other EU countries. If the USA succeeds to eliminate Russia its next target will be China.

They don't have any backup plan. I don't think Russia could have had the foresight to anticipate the Ukrainian response nor the economic retaliation from the international community. Their only remedy is doing trades with China and India. They might bank on eastern Europe caving in to their energy demands and opening up new imports for Russian oil but the politicians don't care about increased energy cost. It disproportionately affects the poor.


Sanctions work both ways, but as I mention, the politicians don't care. They're wealthy enough.

Ukraine are having tough time from the war, the same goes to Russia.  Russia is a great nation with a strong economy,  since the Ukraine- Russia  war started their wont be no way Russia can escape challenges from it economy.with the fact that they have been giving several sanctions that can affect their economy so seriously. Russia economy will be having be having some tough time because some countries that used to be a business partner with Russia would not want to continue because of the war.

Correct me if I'm wrong, but doesn't Russia selling oil to Asia count as a backup plan? I read an article claiming that Russia had over $20b in revenue from selling crude oil, which is a 50% increase just for 2022. On the other hand, Europe is suffering from immense inflation and excessive gas prices, burdening both whole nations who are forced to implement measures to tackle the excessive costs of living.

Probably they have a back up plan but whatever it is, that will still cost them billions of money. The news I've seen, all of the ways of paying them and them paying their debts, they've been closed and shut.

This sanction, it's not them that's feeling it most but the other countries that have been badly ouching of the price of oil. But if they can't feel it yet, eventually, they'll come along with their alliances but still, it's a heavy effect on them.

No war that comes will leave the whole system to be same before the war began. There is no way that the Russian economy will feel the same. One point is that I don't believe that there was budget for the invasion and if this is confirmed that means other parts of the economy budget expenditure were adjusted to take care of the war, it means that the functionality of that sector will be reduced. Again to that, the sanctions are affecting the Russian business men which in return pay tax. Supplies of products including electricals have crumbled and companies are going away. This will definitely have negative effect on the economy if not now but in the future.

Billions of dollars in revenue sounds like much, but if it's a few billion over a year, it's not significant enough. Initially, the panic and sanctions did lead to ruble explosion, but very strict monetary policies, forcing to basically abandon foreign currencies and limiting any foreign currency withdrawals, along with linking ruble to gold, did the thing to stabilize the ruble. However, that doesn't mean that all is good in Russia and the economy wasn't hit. I watch videos of a Russian youtuber occasionally where he walks in the supermarket, talking about the prices and comparing them to how they used to be, as well as showing big malls and how they used to be. From that, it seems that the food prices grew generally 1.5-2x, which if you ask me is huge. Also, a significant number of people lost jobs, and salaries didn't grow. So Russians can now afford less than they used to, and tons of clothing brands and food chains are no longer operating in Russia. So there's impact, but Russians are also quite used to shitty lives and adjusting to increasingly worsening conditions, and thus that's not enough to cause meaningful change in terms of the war. But some effects are indeed long-term and may become more pronounced later.

In my opinion, there is no back-up plan ....  

At one time, former Russian Prime Minister Dmitry Medvedev suggested that Russia is too important for other countries to remain isolated forever.  He suggested that the initially imposed economic sanctions would eventually be lifted or relaxed.  

However, this is an overly optimistic statement .... 

The oil and gas embargo, in my opinion, has disastrous consequences for the Russian economy.  Also catastrophic is the ban on the import of Western technology.  

However, all these effects have a long-term effect.

This effect will not appear immediately, but will have disastrous consequences.

At first I'm a little off topic, but about part of your post. I'll just inform you - a country that carries the idea of ​​naZism, rashiZm and total terror - cannot fight against nationalism in another country, especially against invented nationalism.

Regarding the impact on the economy. I will not one-sidedly assess the situation, it is not beautiful. This conflict has actually created economic problems for a very large number of countries. The EU, for example, got a problem that was talked about for a long time, but the policy of flirting with a pathetic parody of the Fuhrer led to it. The problem is the very significant dependence of the economies of some large countries in the EU on gas and oil from a terrorist state. The EU had and still has the opportunity (now it will be much more expensive, but you have to pay for all idiotic actions) to diversify gas and oil supplies in such a way that the loss of one of the participants in the supply does not lead to significant problems. But corruption in the EU (although objectively - this process began long before the creation of the EU), pragmatism and reason won.
Regarding other problems that the world has received as a result of the terrorist war unleashed by Russia in Ukraine, and the confrontation of the whole world against a terrorist country. The supply of grain to the world market - a problem is also brewing here. It is connected with the fact that most likely Russia will limit the sale of grain to the EU. At the same time, Russia does not give Ukraine, by blocking civilian ports, seizing territories, and stealing grain stocks from the temporarily occupied territories of Ukraine. I think this market will be divided very quickly by Canada, the US and Australia, while maintaining some market dissatisfaction.
Also, some restructuring of the market will occur in the field of inert gases. Russia supplied about 30% of neon, which is in demand due to its active use in the production of microelectronics. But these volumes can be replenished after some time by China and Ukraine. After the start of the terrorist attack, the production of neon was suspended in Ukraine, but the production itself is operational. Rising prices caused by the ban on the export of inert gases from Russia have increased gas prices, which will positively affect the income of Ukrainian companies.
Another area of ​​potential problems is fertilizers. Sanctions were imposed against Belarus and Russia, for the supply of their potash fertilizers. In volumes, this is 20% of the world market, from Belarus. Russia also stopped shipments of ammonium nitrate.
Perhaps he missed something, but did not find other products that are significant for the world market. Just do not forget that Russia's share in the world economy is less than 2%.

What problems does Russia have?
First you need to understand the structure of Russia's export/import.
Exports are mostly represented by natural resources, and first of all, these are oil, gas, and derivatives. It is also precious metals, wood and some others. Resources predominate in the structure of exports.
Imports are mostly technologies, high-tech equipment, machine tools, devices, computers, semiconductor devices, chemicals, medicines, and medical equipment, technological and industrial equipment (including for the extraction and processing of oil and gas).
 
Given that even according to official statements, imports to Russia fell after it unleashed a terrorist war against Ukraine by almost 90%! Considering the above directions of imports, sanctions of the 6th package and the expected subsequent ones, in 3 months Russia lost what, for example, the USSR was deprived of for 10 years, which ultimately led to its bankruptcy and collapse. Considering that in 2022, Russia officially banned the open publication of some economic and financial indicators, it is difficult to give specific figures. But the sanctions hit critical imports and left Russia without technology. For a country, essentially a third world resource-based economy, this means the collapse of industry, or the decline of the economy by the middle of the 20th century. The only thing that still keeps the country afloat a little is the export of resources, but this is also rapidly declining. It is absolutely clear that sanctions are not a blow to the head with a sledgehammer - they do not give an instant result
But this is a process that systematically destroys the country's economy. Well, and most importantly, at the current stage, it is impossible to lift the sanctions and return everything to the pre-sanction period. Many countries that imported raw materials and some goods from Russia have already changed suppliers, and returning back is extremely difficult, and even if such a decision is made, it will be very long in time.

I just want this war to end up but we don't know what will be the contributing factor that could make them decide to stop this because Ukraine leader and Russian leader seems showing no sign that they surrender or end this for humanity maybe the pride of each other is at stake on this and they want one of them became a winner to show how strong their country is. For sur this will have long term effect to Ukraine economy especially there country has been destroy by this war.

Maybe its time for other country to stop helping both of them because for continuous helping them will just give them confidence combat against each other.

it seems the move to wage war with ukraine was really suicidal. with the health rumors of putin, i am wondering if that contributed to his decision and it seems he won't give up even if his countrymen, his soldiers are badly affected. we don't know how long they can hold this war. but definitely, this has severe effect in their economy. his people will find it hard to recover. but not only russians, it is the same with ukranians. but one good thing about ukraine, when they will restore their economy, i believe there will be countries offering financial help. but with russia, it will be few and they won't disclose which countries will pledge help to their restoration.

To me its economic suicide and thats also blind one! Im not sure what they are still trying to achieve. They don't understand that Ukraine being very small country in front of the Russia has given toughest fight ever. No matter what, NATO and US will keep supporting Ukraine and giving the armoury to fight with them. Russia will definitely go in huge unrecoverable debts once all the business starts to go off the grid from Russia. The process is slow because all the businesses has to plan their journey out of Russia very smoothly so that they wont hamper their revenue. Most of them might be making deals with their banks for settlement overseas, some of them might be selling off their properties so that they could at least recover the property valuations towards their businesses. This however is applicable to the businesses who had off shore chains in Russia. In bigger picture Russia is not doing well, they will collapse.