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The European Commission estimated the cost of sanctions [imposed on Russia] for the EU to €40bn (0.3 per cent of the EU GDP) in 2014 and €50bn (0.4 per cent of EU GDP) in 2015. In addition, it was anticipated that the Russian food ban would cost the EU €5bn (DG EPPD 2017, p. 11). [...]

It is between 2013 and 2016 that the major fall in EU’s export to Russia took place and it fell by 39.4 per cent or €47 billion. After 2016 export started to recover and the accumulative result 2013-2017 is a total fall in export to Russia of 16.6 per cent, or €17 billion. Thus just in one year 2016-2017, the EU recovered €30bn of its previous export losses (Eurostat 2018).

The source isn't really providing much insight why this rebound took place. As far as I know sanctions weren't dropped...

Throughout 2017 and 2018, the EU extended sanctions every six months against Russia, adding six entities involved in the construction of the bridge over the Kerch Strait between Russia and the Crimean Peninsula

So what explains the large rebound?

A German article assigned some of the rebound to the 2018 World Cup preparations, but it seems a little simplistic. The article from which I quoted the bit on sanction extension/maintenance does mentions some Italy-Russia deals on energy (Enel-Rosseti) being signed in this period, but it's unclear to me if these had any trade effect during 2017.


Minor update: there's now data available for 2018 as well:

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  • Do these figures include illegal trade (e.g. via estimation)? – JJJ Mar 30 at 12:54
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    Possibly: statista.com/statistics/262858/… – Denis de Bernardy Mar 30 at 12:55
  • @JJJ: I think no. I know there's illegal trade via Belarus, etc. But that would be hard to trace by Eurostat. – Fizz Mar 30 at 12:56
  • @Fizz we can always make educated guesses, in the pear example from de Volkskrant: "In 2013, the year before Putin’s ban, Lithuania imported 33 thousand tons of pears from the Netherlands and Belgium, according to data of Comtrade, the trade database of the United Nations. In 2015, the first full year under the ban, it suddenly amounted to 137 thousand tons." Follow the pears. ;) – JJJ Mar 30 at 12:58
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    @Fizz: It doesn't explain the EU exports to Russia, though, unless one assumes they can only pay for those with oil money. – Denis de Bernardy Mar 30 at 13:15
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One reasonable explanation would be that the rise corresponds to a simple correction after an excessively large decline. However, there is another reason:

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The image shows the development of Brent oil prices in about the same period. Source: TradingEconomics

Russian export volume is highly correlated with oil prices. And imports grow/decline with exports -even though not necessarily with each trading partner or without time lag.

P.S.: There is another good answer by @MaksimKhaitovich. However, I do not completely agree:

  • I'm not convinced that the closure of nuclear or coal plants has driven Russian gas exports to Europe as the decline is mostly compensated by an increased share of renewable energy. The expected substitution of coal by liquefied natural gas didn't happen as the price of emission certificates under the ECTS had been too low (or the price of LNG too high) and the share of oil in electricity generation has always been low.
  • About food production: Food imports haven't been negligibly small nor are they now. When I was in Moscow in 2014, I had been astonished how much food, even food that could easily be produced in Russia (e.g., Polish/German cucumbers), was imported from the EU. The newspapers showed that 80 per cent or more of meat was imported. Domestic food production has dramatically increased in the last few years. Still, in 2018 Russia imported food for 5.7 billion euros, which is equivalent to 6.7 per cent of Russian imports from the EU (Manufactured goods: 89.3 %).
  • Those points are generally valid, but I wouldn't agree that renewable generation can really compensate for closure of traditional plants. I suggest basic article here: wind-watch.org/faq-electricity.php. Basically, closed generation fulfills base load, but renewable generation cannot be adjusted by human intervention - it generates energy whenever there is wind. Hence, you can't replace base load generation with, for example, wind generation. Hence - compensation factor is really small – Maksim Khaitovich May 16 at 6:28
  • As for the second point - once again, you compare to 2014, when the localization of agriculture and food production just kicked in. By now food imports from EU fell dramatically. – Maksim Khaitovich May 16 at 6:29
  • @MaksimKhaitovich: Energy: Yes, but base load was still provided by coal (including lignite). At stromauskunft.de you can see that Germany didn't import more gas ("Erdgas"), actually gas imports fell (except in 2017). Oil has been entirely irrelevant. I'm sure that there hasn't been a significant increase in the UK or France (essentially no fossile fuel) either. – Frank from Frankfurt May 16 at 7:18
  • @MaksimKhaitovich: Food: We agree that food imports have been more important in 2014. Our only disagreement is about whether the food imports in 2018 are insignificant. The relevance of food imports is too low to significantly alter the trade statistics, but the Russian sanctions were meant to hurt the EU (and I think they were not ignored). – Frank from Frankfurt May 16 at 7:21
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Your question has several parts inside of it.

1) General growth of trade is happening due to acceleration of Russian economy growth. Basically, the economy has adapted and is now much more robust than before - hence the growth.

2) More specifically, trade with EU has two components - export from Russia and import into Russia from EU.

Export Russia exports a lot of natural resources, especially energy-related. We export gas (including LNG), oil and its subproducts, coal, electricity, nuclear fuel. Due to local changes EU closes a lot of nuclear plants, coal plants etc, forcing increased reliance on imported gas. Also EU is slowly losing its ability to mine gas within EU (issues with Groningen gas field, for example, force Netherlands to dramatically reduce output). All of it increases exports of gas from Russia. Price growth helps here as well.

Import Since 2014 Russia launched a set of massive national infrastructure projects - huge construction in Crimea, Nord Stream - 2, huge efforts in localization of manufacturing and IT systems etc. All of it requires to import some equipment, services and materials from EU leading to growth of import as well.

3) Effect of sanctions generally is negligible by now and mostly affects some of EU members. If you read what the sanctions actually mean: Russia blocks imports of agricultural goods from EU mostly - hence main damage is done to countries like Italy or Greece and France. Generally Russia localized most of the food production by now. But import of food from EU was negligible small anyway. EU on the other hand blocks sales of military equipment and some double-purpose technologies (which can be used in military) to Russia. If you think about it, Russia is second-largest weapon seller in the world, so effect of these sanctions is negligible as well. Some critical advanced technologies are banned for export (like composite materials) but value-wise their sales were always small.

Hope it helps. Overall, you don't need to be surprised. Politics and actual economy are two very different animals.

  • Brilliant answer. Especially about European gas mining tendencies. – user2501323 May 15 at 13:27
  • Claim about ban on military technology being negligible is just not true. To use example, large chunk of electronics suite of T-14 Armata, Russian tank unveiled in 2015, relies on imported tech. Russian ballistic radars, night vision systems, electronic countermeasures and so on, were not up to required spec and appropriate systems and had to be purchased abroad. While Russian semi autonomous fire-control systems are impressive (if capable of performing as advertised), Russian military equipment is visibly lacking in other capacities. – M i ech May 16 at 11:40

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