Russia's windfall from high energy prices in 2022 is 'starting to wear out,' but it's still making $687 million a day despite the EU ban, new research shows

• Moscow's oil revenues have taken a hit from the EU's ban on most Russian oil imports and a $60 a barrel price cap, per a Finnish researcher.
• But Russia is still making $687 million each day from exporting fossil fuels.

Moscow's oil revenues have taken a hit from the European Union's ban on most Russian oil imports and a $60 a barrel price cap — but more can be done to press the Kremlin into ending its war in Ukraine, the Helsinki-based Centre for Research on Energy and Clean Air, or CREA, said in January 10 report.

The report — which came about a month after the EU's embargo and the price cap kicked in on December 5 — determined that Russia's losing 160 million euros, or $172 million, each day, thanks to the sanctions.

But the country is still raking in €640 million, or $687 million, each day from in fossil fuel export revenues — down from about $1.1 billion a day between March and May 2022 after Russia invaded Ukraine. The resulting war sent energy prices to a 14-year high.

"The short-term windfall generated to Russia by sky-high fossil fuel prices in 2022 is starting to wear out, in part due to reductions in fossil fuel consumption prompted by the high prices," wrote the CREA researchers.

Despite the damage the G7 and EU has wreaked on Russia's energy revenues, the CREA is recommending stepping up the pressure by further lowering the price cap on Russian crude oil to $25 to $35 a barrel — which would slash Russia's oil export revenue by a further €100 million a day.

"Further cuts to Kremlin's revenue will therefore materially weaken the country's ability to continue its assault and help bring the war to an end," said the CREA.

The proposed $25 to $35 a barrel price range would still keep the business economically viable for the world's energy security, but still hit Russia financially, CREA added. International benchmark Brent oil futures are trading around $80 a barrel currently.

Starting February 5, the EU is set to ban Russian refined oil exports, and apply a price cap to such products, and the CREA expects this to cut Russia's fossil fuel revenues by a further €120 million a day.

"The price cap coalition has a strong leverage to push down the price caps, said the CREA. That's particularly since Russia hasn't found meaningful alternatives to Western shipping, insurance, and financial services they need to transport their energy to buyers, since such service providers are now not willing to ship Russian energy products due to fear of breaching sanctions.