The UK To Russia: Thanks, But No Thanks

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What's going on?

Data out on Wednesday showed that UK imports from Russia hit a record low in June.

What does this mean?

The UK has imposed restrictions on over 96% of goods imported from Russia since it invaded Ukraine in February, and most of the businesses whose products weren’t sanctioned have probably stopped dealing with the country anyway. That might be why Russian imports into the UK dropped to £33 million ($39 million) in June – 96% less than the same time last year. A big part of that was down to the fact that the UK didn’t buy a drop of fuel off the country, even though Russia was its biggest supplier of refined oil before the war. Instead, Britain’s been upping imports from other oil-producing countries – think Norway and Qatar – to make up the difference.

Why should I care?

The bigger picture: Discounts galore.
The European Union hasn’t been quite so successful: the region’s imports were up 43% in June, given just how dependent it is on the country’s energy supplies. Russia, for its part, is well aware that Europe would drop it in a hot second if it could, which might be why it’s reportedly in discussions to give several Asian countries up to 30% off long-term oil contracts.

Zooming out: Russia dodges a bullet.
Economists were expecting Russia to have a meltdown following all the sanctions, but its high-priced energy has kept that from happening. In fact, the country’s “current account surplus” – that is, the value of the goods it exports minus the value of the goods it imports – hit a record high in the first seven months of the year. That’s only good news for the economy, which might be why the Russian government is expecting the economy to shrink just 4% this year, rather than the 12% it was forecasting a few months ago.

Originally posted as part of the Finimize daily email.

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