In 2023, Russian exports to Europe dropped by over two-thirds due to the EU’s significant reduction in purchases of Russian oil and gas. This action was taken as part of economic pressure on Moscow following its military offensive against Ukraine. The decline in exports to Europe reached 68%, amounting to $84.9 billion, while exports to Asia, Russia’s primary energy customer, increased by 5.6% to $306.6 billion.
Following Western sanctions, Moscow ceased publishing various economic statistics, including trade data with individual countries. However, separate Chinese customs data indicated that two-way trade between Russia and China reached a record $240 billion in 2023, reflecting the growing economic, trade, and political ties between the two nations. The Russian Central Bank also reported that Chinese yuan deposits in Russian bank accounts surpassed US dollars for the first time in 2023 as the Russian financial system embraced the Chinese currency to overcome sanctions preventing access to the dollar.
Russia’s overall trade surplus in 2023 was $140 billion, marking a 58.5% decline compared to the exceptional energy revenues achieved in 2022. During 2022, the offensive on Ukraine caused a surge in oil and gas prices, and Europe continued to purchase Russian energy for a significant portion of the year despite Western sanctions being imposed on Moscow due to its actions towards Ukraine.
The decline in exports to Europe had a significant impact on Russia’s economy as it relies heavily on export revenues from oil and gas sales. Meanwhile, China has become an increasingly important market for Russia as it diversifies its energy customers away from Europe.
Overall, Russia’s efforts to mitigate Western sanctions through economic ties with China have proven successful as seen by the surge in two-way trade and Chinese yuan deposits replacing US dollars in Russian bank accounts. However, this has come at a cost as Russia’s overall trade surplus has decreased significantly compared to previous years due to reduced demand from European markets following their economic pressure on Moscow due to its actions towards Ukraine.