Russian businesses are locked out of billions as payment issues reportedly pile up abroad

• Russian businesses are being shut out on billions as payment issues and delays are piling up abroad.
• Russia's foreign financial assets have grown $45 billion so far this year, per central bank data.

Russian businesses are being locked out of billions of dollars thanks to payment issues at foreign banks, according to data from Russia's central bank.

Foreign financial assets of the Russian Federation surged another $4.7 billion over the month of July. The nation has seen its foreign financial assets soar by $44.6 billion so far this year, more than double the $21.4 billion increase in foreign financial assets recorded in the same period in 2023, according to data from the Bank of Russia.

The jump in foreign assets is largely due to "lags in settlements for foreign economic activities," and accumulated payments abroad as "international settlement chains become more complex," central bankers said in their latest estimate of the country's financials on Tuesday, likely alluding to payment issues stemming from Western sanctions.

The US Treasury threatened to impose secondary sanctions on institutions engaging with Russia's economy last year. That move pushed international banks to shut their door on Russian businesses or heavily curb the amount of financing they offer — even from Russia's closest allies.

India, which was a huge buyer of Russian oil in the early days of the Ukraine invasion, turned away several oil ships from its coasts this year after payment scuffles between Russian suppliers and Indian refiners, traders told Reuters.

The United Arab Emirates, another big Russian oil customer, just cracked down on Russia's shadow fleet, banning some tankers from docking at its ports, according to shipping data cited by Bloomberg.

And China, one of Russia's largest economic partners, now has most of its banks refusing to accept payments from Russia, one Russian media outlet reported.

Moscow still has a handful of allies willing to trade and do business. The nation is also pursuing alternative payment methods, such as crypto, to keep business flowing.

Still, experts say that Russia's increasing isolation from global markets could have a big consequence on its economic future. The nation looks poised to enter a severe recession within the next year, one UC Berkeley economist told Business Insider, pointing to Moscow's weakening energy trade and its waning access to the US dollar.