How do sanctions and export controls affect Russian oil and diesel exports?

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1. 1

   The Impact of the 2022 Oil Embargo and Price Cap on Russian Oil Prices

   The Energy Journal (Kilian et al.)Published Feb 12, 2026Checked Oct 12, 2026

   “This paper documents the effect of the oil embargo and price cap on Russian oil prices and oil exports in the wake of the Russian invasion of Ukraine in February 2022. We show that the embargo forced Russia to accept a $32/bbl discount on its Urals export price in March 2023 relative to January 2022, nearly half of which is directly attributable to the higher cost of shipping crude oil over longer distances, as Russia diverted most of these exports to India. Based on a calibrated model of global oil supply and demand, the remainder ($17/bbl) can be explained by increased Indian bargaining power in the Urals market. We also provide a similar analysis for the ESPO price discount on exports to China. The price cap, in contrast, may have alleviated concerns about a possible disruption of Russian oil supplies from a broader ban on the use of Western maritime services, but its effect on Russian oil export prices in March 2023 was negligible. JEL Classification: F51, International Conflicts, Negotiations, Sanctions, Q41, Energy: Demand and Supply, Prices, Q48, Energy: Government Policy”

2. 2

   Design and implementation of the price cap on Russian oil exports

   Journal of Comparative Economics (Johnson et al.)Published Jul 25, 2023Checked Oct 12, 2026

   “Basic economics teaches that price caps are bad – limiting the price of a good distorts demand and discourages producers from supplying the market. So why did the Biden Administration, led by Janet Yellen, the consummate economist, champion a price cap on oil from Russia after it invaded Ukraine in 2022? The answer is that this price cap, implemented for crude oil in December 2022 and oil products in February 2023, differs significantly from the standard cap discussed in introductory economics classes. This paper explains these differences and describes the first six months this policy has been in existence. We provide background on Russian oil trade and describe the goals, structure, enforcement and economics of the price cap. We review the main concerns and contrast them with the outcomes observed to date.”

3. 3

   Tightening the oil-price cap to increase the pressure on Russia : Why the current sanctions regime is failing, and how to fix it

   Research paper (Dubrovskiy & Nixey)Published Apr 16, 2025Checked Oct 12, 2026

   “Although oil rents are equivalent to just 10 per cent of Russian GDP, cutting them off would hinder Putin’s ability to maintain his power structure. Ukraine’s allies can target this vulnerability by tightening the existing oil-price cap mechanism, which in principle limits the export price of Russian crude oil at $60 per barrel. The paper’s recommendations include imposing an automatic, gradual reduction of the cap in response to Russian attacks on Ukraine, closing loopholes in the shipping industry that Russia has exploited via its ‘shadow fleet’, and implementing more robust enforcement. The powers behind the sanctions – including the US, EU and UK – can use their geography and prominence in the fields of maritime regulation and insurance to impose standards and prohibitions more widely. As the paper points out, European countries in particular have the power to enforce a modified oil-price cap rigorously, even without US support or compliance from Russia’s partners, owing to their dominance of the marine reinsurance industry and their effective control of the Baltic Sea straits, through which 60 per cent of Russia’s seaborne oil exports travel.”

4. 4

   Toughening Financial Sanctions on Russia

   Intereconomics (Hilgenstock et al.)Published Jul 1, 2023Checked Oct 12, 2026

   “Enforcing Energy Sanctions and Reducing Shadow Reserves EffectivelyFinancial sanctions are key in enforcing restrictions on Russian energy exports -in particular the G7/EU oil price cap regime -due to financial institutions' critical role in cross-border transactions.While the energy sanctions regime is having an impact on export earnings and budget revenues, evidence for potentially widespread violations is also emerging.Moreover, favourable external dynamics have allowed Russia to accumulate substantial assets abroad, "shadow reserves", which need to be kept out of reach of the regime.To address this, a number of steps could be taken, including tasking central banks and supervisory authorities with the identification of Russian foreign assets to ensure that funds cannot be used to widen monetary and fiscal policy space, and addressing loopholes in the sanctions regime.”

5. 5

   Not all oil types are alike in trade substitution.

   Nature communications (Öhlinger et al.)Published Aug 29, 2024Checked Oct 12, 2026

   “Motivated by the ongoing war in Ukraine and the public debate on sanctioning crude oil imports from Russia, we estimate the elasticity of substitution between different crude oil types. Using European data on country-level crude oil imports by their field of origin, we argue that crude oil is far from a homogenous good, and that the relevant substitutability for analyzing the impact of trade sanctions must account for the quality of different oil types in terms of their density and sulfur content. Distinguishing crude oil imports by their chemical composition, the elasticity of substitution between types is substantially lower than suggested by previous estimates. Our results also suggest that, by neglecting these differences in quality, standard estimates underestimate the production disruptions and price effects in crude oil refining resulting from sanctions.”

6. 6

   Econometric forecasting of Russian GDP for 2023 under the sanctioned price cap on the Urals crude oil export

   Market economy problems (Afanasiev & Ponomareva)Published Jan 1, 2023Checked Oct 12, 2026

   “The originality and advantage of this production function over many other forecast models are the following: firstly, its average ex-post forecast errors for 22 years ahead do not exceed 5,1%, and, secondly, over these years the direction of the dynamics of ex-post forecast GDP coincides almost everywhere with the direction of the dynamics of actual GDP, including during the crisis of 2009, sanctions pressure started in 2014 and the epidemic of the Wuhan coronavirus SARS-CoV-2 in 2020-2021. The results of econometric forecasting showed the following: at a price of $55, the minimum growth rate of Russia's GDP will be – 1,1%, the average will be 0,2%, and the maximum will reach 1,6%. At a price of $65, the minimum growth rate of Russia's GDP will be 1,7%, the average will be 3,1%, and the maximum will be 4,5%. Thus, according to our forecasts, the Russian economy will grow, instead of falling into recession as many geo-economic and geo-political opponents of Russia would anticipate.”