The West is facing challenges with its sanctions policy against Russia, particularly regarding the diversion of western goods to Russia via Central Asia. Kyrgyzstan has emerged as a key conduit for European exports to Russia, with significant increases in exports from various EU states. This trend has led to concerns about the effectiveness of US-led Western sanctions on Russia. The situation has also impacted the energy market, pushing Russia towards expensive LNG and increasing European costs. Efforts to curb the flow of western goods through Central Asia, including Kyrgyzstan, have been discussed, with concerns about the impact on Putin's access to western technology and the European economy. The US is aiming to reduce Russia's oil and gas revenues by half, indicating a long-term commitment to maintaining sanctions on Moscow.
Thanks to @bneeditor for including me in this story. EU listened to lobbying from Greek shipping oligarchs and exporters. Consequently, Russia sanctions are way too soft. The result is a “forever” war in Ukraine and stagnation of Europe’s economy. https://t.co/aPFH9FSUCs
Thanks to @BrucePannier from @RFERL for picking up our work on European exports to Central Asia as a way to circumvent export controls on Russia. These exports are of small importance to European companies, but give Putin access to western technology... https://t.co/t70PSrWGSV
German exports to Russia via Central Asia 1. Huge jump in German exports after Mar. '22 2. It is highly likely these goods end up in Russia 3. This is so obviously not in Germany's interest 4. It gives Putin access to western technology 5. No short-term profit can be worth that https://t.co/rJckY4DGos
Single biggest hotspot for trade diversion of EU goods to Russia is Kyrgyzstan, where EU exports are up 820% in 2023 vs 2019 (top left, blue). Kyrgyzstan is the perfect candidate for secondary sanctions. It's not systemically important and clearly funneling EU goods to Russia... https://t.co/0xa8pw7clz
Standard push-back in Europe on export diversion via Central Asia: "Oh, fine, but this is small." Not true. Take Germany. German exports to Central Asia have gone from practically nothing to € 100 mn per month. That offsets 1/3 of the drop in direct German exports to Russia... https://t.co/g9xtimty7d
US pressures three countries over Russian oil sanctions – Reuters https://t.co/MVMV8w1e07
RUSSIA ASSUMES WESTERN SANCTIONS WILL LAST FOR MANY YEARS (Reuters) Russia is assuming that sanctions against it by the United States and its allies will last for many years, but that U.S. influence on the world economy is waning, Kremlin spokesman Dmitry Peskov said on Friday. https://t.co/dOXzfmvtbs
⚡️US sanctions three companies that help Russia circumvent oil price cap. “Enforcement of the price cap on Russian oil is a top priority for the United States and our coalition partners,” said Deputy Secretary of the Treasury Wally Adeyemo.
Narrow commercial interests undercut the EU response to Russia. Greek oligarchs sell ships to Putin’s shadow fleet. Firms export to Russia via Central Asia. This is a governance crisis for the EU. Thanks to @_MarionSendker from @DIEZEIT. https://t.co/lPaxF1SUAc
The US is aiming to halve Russia's oil and gas revenues by the end of this decade, Geoff Pyatt, @AsstSecENR, tells @FT, arguing western sanctions on Moscow will need to be maintained “for years to come”. https://t.co/tEuJLifFtg via @thomas_m_wilson @xtophercook
The US is aiming to halve Russia's oil and gas revenues by the end of this decade, Geoff Pyatt, @AsstSecENR, tells @FT, arguing western sanctions on Moscow will need to be maintained “for years to come”. https://t.co/tEuJLifFtg @xtophercook
🛢️ Sanctions targeting Russian oil are falling apart. What will the West do? https://t.co/gxnN3uOKK5
🤦 EU states want less strict ban on re-export to Russia in new sanctions package – Reuters https://t.co/PLJa9LZQN5
EU exports to Central Asia 1. Kyrgyzstan: +821% (top left) 2. Kazakhstan: +98% (top right) 3. Georgia: +81% (bottom left) 4. Azerbaijan: +28% (bottom right) Pretty clear who the main conduits to Russia are... https://t.co/d3mdMV4wPh
Prior to Russia's invasion of Ukraine, EU exports to Central Asia averaged $1.8 bn per month. Since the invasion, that's been $3.1 bn per month. All that extra stuff heads to Russia - Central Asia is just a way station. EU needs to shut down this back channel that helps Putin... https://t.co/WTYfpW4brF
Central Asia is a hub for western goods headed to Russia. Countries in the region say they just import more from the West as trade via Russia is down. Nonsense! Imports from Russia are up across the board. There is no substitution. Only circumvention of western export controls... https://t.co/hOKrUoew25
Monthly exports from the Euro zone to Kazakhstan have doubled since Russia invaded Ukraine. Since Feb. '22, "excess" exports to Kazakhstan total EUR 7 bn, so the numbers aren't small. Only way to stop this is to lower the G7 cap. If Putin runs out of cash, he can't import... https://t.co/6ZqYzoyLrL
Net result of the energy sanctions and countersanctions has not been a cutting off of Russian gas but rather pushing the Russian gas market toward expensive LNG and away from piped gas into Europe. Only difference this makes is to push up European costs and destroy the economy. https://t.co/vI7d94mUR4
ICYMI: Why US-led Western sanctions on Russia have failed https://t.co/aBXI77NgIj
After Russia invaded Ukraine, you can see how word spread that Kyrgyzstan is a good conduit for western exports to Russia. Lithuania (LT) and Germany (DE) figured this out first. Then Poland (PL), followed by Italy (IT) and Finland (FI). Even the US is in on this (orange)... https://t.co/ZgYOPYEHaW
Exports from various EU states to Kyrgyzstan, which are only disguised exports to Russia, have increased sharply compared to the level of 2021. Exports from Poland have risen by 2100%, Germany by 1300%, the Czech Republic by 1200%, and Hungary by 300%. https://t.co/gdRF8r2tWi
Kyrgyzstan is a key destination for European exports that - ultimately - go to Russia. Estonian (EE) exports to Kyrgyzstan are up 10,000%. Finnish (FI) exports are up 3,100%, Poland (PL) is up 2200% and Greece (GR) is up 2100%. And - no - definitely not everyone is doing this... https://t.co/dsdGVECdpZ
One way to stop the flow of western goods to Russia via Central Asia is to make an example of one country and use secondary sanctions. Kyrgyzstan is the perfect test case. It's small, not remotely systemically important and very clearly facilitating trade diversion to Russia... https://t.co/kYDLmkHQUx
The West needs to rethink its sanctions policy against Russia https://t.co/aBXI77NOxR