Russian economy chaos as crucial revenue 'degraded'

The Russian economy has been dealt a blow as European and US measures seem to be "degrading" revenues from third-country importers of Vladimir Putin's oil. This week, Donald Trump imposed sanctions on more than 115 Iran-linked individuals, entities, and ships, some of which are involved in transporting Russian oil. The US President has also told countries to stop buying oil from Moscow, also threatening 100% tariffs unless the Kremlin agrees to a peace deal with Ukraine.

Reports suggest that Indian oil refineries are diversifying crude oil imports and increasingly buying from Azerbaijan, Nigeria, and the United Arab Emirates after Europe intensified sanctions on Russian oil exports, the Institute for the Study of War (ISW) notes. In particular, the Nayara Energy oil refinery in west India is believed to be struggling to receive crude imports, as well as export processed fuels because of European measures.

The Russian state oil company Rosneft owns 49.13% of Nayara Energy, and that the oil refinery funds the Russian full-scale invasion of Ukraine, Bloomberg reported.

The outlet also asserted that the refinery is currently operating at between 70% and 80% of its capacity of 400,000 barrels each day.

The ISW added: "The European Union's July 2025 18th sanctions package specifically targeted the Nayara Energy oil refinery and other facets of Russia's oil revenue.

"ISW previously assessed that the European sanctions package would likely degrade Russian oil revenues beyond what the Kremlin previously expected, posing a potential risk to the Russian federal budget and earmarked defense spending.

"US sanctions that target countries that purchase Russian oil will further hinder Russia's ability to fund its war in Ukraine."

At least two vessels loaded with Russian oil set to be delivered to refiners in India were diverted to other destinations, according to Reuters.

The news agency added that three ships - the Aframaxes Tagor and Guanyin and the Suezmax Tassos - were scheduled to deliver Russian oil to Indian ports this month, according to trade sources.

All three are subject to US sanctions.

Russian state news service TASS reported today that Russia and Saudi Arabia aim to expand economic cooperation, and released a statement saying that the two states had discussed "the situation on the oil market and the prospects for cooperation between the two countries within OPEC+".