Europe's 'Russian energy' paradox: Russian gas purchases in 2024 exceed aid sent to Ukraine

Despite aggressive sanctions to counter Russia's war chest, the European Union continues to import Russian fossil fuels in significant volumes. According to the latest report by the Centre for Research on Energy & Clean Air (CREA), the EU spent $23 billion on Russian fuels in 2024. This is a 6 per cent value drop year-on-year but only a 1 per cent reduction in volume. Notably, the EU's fossil fuels from Russia exceeded the $19.5 billion in financial aid it provided to Ukraine in 2024.  

According to CREA, Russia's total fossil fuel revenues in the third year of the invasion reached $253 billion. The total earnings since 2022 have surpassed $885 billion. Despite Western sanctions targeting Russia's oil fleet, the revenues have only dropped by 8 per cent compared to pre-invasion levels.

Meanwhile, Europe has scrambled to reduce its dependency on Russian energy. While gas imports have fallen from 45 per cent in 2021 to 18 per cent in 2024, the EU still accounts for almost one-quarter of Russia's fossil fuel revenues. EU recently came up with the latest sanctions on Russia against the backdrop of Trump-Putin 'peace talks.' While the US is considering a softer stance on Russia, the EU continues to maintain a sanctions grip on Russia's war revenues.

Russia has adapted to sanctions by re-routing oil exports using a growing 'shadow' fleet. A total of 558 Russian shadow vessels worked overtime in 2024 to deliver oil worth $87 billion. China, India, and Turkiye bought the bulk of Russia's oil, with China leading with $81.6 billion. Indirect flow of Russian oil to G7 countries via India and Turkiye also surged, with imports worth $18.8 billion.

The report highlights 'ship-to-ship' transfers conducted on EU waters. Russia trans-shipped 5.2 million tonnes in 2024, with 43 per cent involving shadow tankers. The highest STS activity was recorded in Greece, Romania, Italy, and Malta. Over 87 'hub tankers' have been identified since 2022, with 68 still active.

The report also raises environmental concerns around shadow tankers, with damages reaching over $1 billion dollars.