The EU's trade with Russia has plummeted due to the impact of the Ukraine war.

The trade between the European Union (EU) and Russia has significantly shrunk in the nearly three years since the war began in Ukraine.

In February 2022, following the start of the war in Ukraine, the EU implemented a series of unprecedented sanctions against Russia, leading to sharp declines in mutual trade and changing the dynamics for both sides.

In 2021, Russia represented 5.8% of the EU's total goods trade with the world, making it the EU's fifth-largest trading partner.

THE EU WAS RUSSIA'S LARGEST PARTNER

Before the war, the EU was Russia's largest trading partner, holding a 37% share of Russia's total international trade. During this period, 36.5% of Russia's imports came from the EU, while 37.9% of its exports were directed to the EU.

The total goods trade between the EU and Russia was at 257.5 billion euros in 2021, but the sanctions imposed after the war began led to a sharp decline in mutual trade.

According to EU institutions, in February 2022, when the war started, the EU imported 21.4 billion euros from Russia and exported 7.6 billion euros. However, throughout 2022, the EU paid a very high price for energy products, especially natural gas, which saw rising prices.

The EU's imports from Russia peaked at 22.2 billion euros in March 2023, but by September 2023, EU imports from Russia had fallen to 3.1 billion euros. Thus, EU imports from Russia decreased by 86% since the beginning of the war.

Meanwhile, Russia's imports from the EU have also dropped to 2.7 billion euros during this period.

OVERALL TRADE IS DECLINING

Thus, the total monthly trade volume, which was 29 billion euros in February 2022, fell to 9.2 billion euros in February 2023 and 6.2 billion euros in February 2024. In September of this year, when the most recent data was published, the bilateral trade volume was calculated at 5.9 billion euros. With this decline, the bilateral trade volume between the EU and Russia has dropped to one-fifth of its pre-war level.

The EU's exports to Russia in the third quarter of this year decreased by 58% compared to the same period in 2022, and imports from Russia also fell by 86%.

THE EU'S TRADE DEFICIT HAS DECREASED

The high prices paid by the EU for energy products, especially in 2021 and 2022, had caused a significant trade deficit. The EU's trade deficit with Russia peaked at 46 billion euros in the second quarter of 2022. However, due to import restrictions and falling energy prices, the EU's trade deficit with Russia decreased to 600 million euros in the third quarter of this year.

Despite this, the EU has not halted trade with Russia in various products essential for its economy, including natural gas, LNG, fertilizers, and nickel.

RETALIATORY SANCTIONS FROM THE EU AND RUSSIA

So far, the EU has implemented 14 sanction packages aimed at weakening Russia's economic foundation, depriving it of critical technologies and markets, and significantly restricting its ability to wage war.

Sanctions in the financial sector include a ban on the SWIFT payment system for 10 Russian banks, restrictions on Russia's access to EU capital and financial markets, blocking transactions with the Central Bank of Russia and the Russian Regional Development Bank, preventing Russian citizens from making high deposits in EU banks, prohibiting the sending of banknotes to Russia, and not offering crypto asset transactions to Russians.

Sanctions in the energy sector include a price cap on the maritime transport of Russian oil and oil products, a ban on the import of crude oil, oil products, and coal from Russia, a prohibition on purchasing LPG, a ban on the re-export of Russian liquefied natural gas (LNG) from EU facilities, an export ban on goods and technology to Russia's energy sector, and a prohibition on new investments in the energy and mining sectors.

EVEN COMPUTERS ARE UNDER SANCTIONS

Sanctions in the transportation sector include closing EU airspace to all Russian aircraft and EU ports to Russian ships, a ban on the export of goods and technology to Russia in the aviation, maritime, and space sectors, halting Russian road transport carrying goods to the EU, and preventing various services to Russian ships.

In the defense and technology sectors, the export of dual-use goods and technology to Russia, products that can be used in drone production, weapons and ammunition, IT, electronic and optical components, chemicals, and laptops have also been included in the sanctions.

In the trade sector, the export of luxury goods to Russia has been banned, quotas have been placed on the import of potassium and chloride, and the export of steel, iron and cast iron, cement, bitumen and asphalt, copper and aluminum wire, pipes, wood, paper, synthetic rubber and plastics, as well as jewelry including diamonds and gold has been prohibited.

Economic sanctions have also prevented the provision of accounting, auditing, bookkeeping, and tax consulting, architecture, engineering, and legal consulting services to Russia or Russian citizens.

BEFORE THE WAR, THE EU WAS RUSSIA'S LARGEST TRADE PARTNER

The total goods trade between the EU and Russia was at 257.5 billion euros in 2021. During this period, the EU imported 158.5 billion euros from Russia. Fuels and minerals accounted for 62% of the EU's imports, amounting to 98.9 billion euros.

Additionally, the EU imported 3.2 billion euros worth of wood, 7.4 billion euros worth of iron and steel, and 1.8 billion euros worth of fertilizers.

The EU's exports to Russia were at 99 billion euros. One-fifth of the products sold to Russia were machinery and equipment, with an export value of 19.5 billion euros. Following these products were motor vehicles at approximately 9 billion euros, pharmaceuticals at 8.1 billion euros, electrical equipment at 7.6 billion euros, and plastic products at 4.4 billion euros.

During the mentioned period, service trade had also reached levels of up to 30 billion euros annually. The EU side was exporting services worth 20.5 billion euros per year, while Russia was exporting services worth 8.9 billion euros.