Three years have elapsed since Russia's full-scale invasion of Ukraine, fundamentally altering the nation's trading relationships across the globe. Initially, nearly half of Russia's exports were directed toward European nations—including Belarus and Ukraine—primarily consisting of energy resources like crude oil and natural gas. By the end of 2023, this picture has dramatically shifted, with data from the Observatory of Economic Complexity (OEC) illustrating new trade dynamics.
According to recently released OEC findings, China and India have emerged as Russia's foremost trading partners, now accounting for nearly half of all Russian exports. Approximately 33% of these exports are sent to China, whereas India receives around 17%. Prior to the invasion, these figures were significantly lower, with China representing fewer than 15% and India less than 2% of Russian exports.
This major pivot can largely be attributed to the stringent Western sanctions levied against Russia, which have severed its access to European markets. By 2023, only about 14% of Russian exports still go to European countries—down from 48% just two years prior. While OEC has not made the 2024 statistics available yet, other resources, such as the Russian Foreign Trade Tracker from the Bruegel think tank, indicate analogous trends.
Importantly, the presented data solely includes official statistics. Underreported are the sizeable volumes of oil transported by what experts refer to as Russia's "shadow fleet"—an assemblage of aging, often uninsured ships. These shadow fleets primarily ferry oil to India, China, and Turkey, facilitating the circumvention of sanctions. According to the Kyiv School of Economics, around 70% of all maritime oil shipments from Russia utilize this covert fleet.
From 2022 onwards, Russia's reorientation of its export streams has been influenced by two main factors: the European Union's cessation of direct purchases of Russian pipeline gas and oil, and the increasing enthusiasm of Beijing and New Delhi to import Russian energy resources. Over these past three years, oil supplies from Russia to the EU decreased by 90%, and gas imports dropped from about 40% to approximately 15% of the EU's total gas imports.
Industry experts, including Zsolt Darvas from the Bruegel research center, observe this trend. "Countries, which did not impose sanctions against Russia, especially China, as well as Turkey, Kazakhstan, and some other states, significantly increased their trade volumes with the Russian Federation," he notes.
Among these shifting alliances, the relationship between Russia and China has changed most dramatically. Elina Ribakova, Economist at the Peterson Institute for International Economics, articulates this shift starkly: "Russia is now a vassal of China." With such rampant trade imbalances, Beijing's influence over Moscow's economic policies has grown tremendously, leading to concerns about Russia's dependency on Chinese imports for high-tech and industrial goods.
This relationship has bolstered China's standing as the largest trading partner for Russia, controlling over half of all Russian imports by 2023—double the share from 2021. Meanwhile, the EU's stake has plummeted from 45% to 22%, underscoring the seismic shifts within the global trade framework.
Despite Moscow's efforts to adapt and establish new trade partnerships, experts caution against assuming these changes will yield economic improvement for Russia. Darvas succinctly notes, "Russia may survive, but it no longer receives the same quality of goods as before," which could have lasting impacts on its economy.
While the economic outlook might not be as dire as previously feared, as Ribakova points out, the alteration of primary trading partners resembles the shift toward a multipolar world order, which Russia has actively sought. This transition allows President Putin to maintain relations with nations like China and others, yet it also brings inherent vulnerabilities—making Russia susceptible to external pressures from its new partners.
Overall, as Russia restructures its economic framework to prioritize Eastern markets and maintain its geopolitical relevance, it effectively navigates the complex waters of international trade. This realignment may bode well strategically, but it also signals significant changes within the balances of power—both economically and politically—on the global stage.