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Tymofiy Mylovanov

@Mylovanov

Apr 20, 2023 • 12 tweets • 6 min read • Read on X

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Sanctions were supposed to deny Russia's ability to finance the war. But sanctions were delayed and it didn't happen. Now sanctions are finally starting to bite. At the end of 2022 liquid reserves were slightly above 1 month of import. More facts: 1/

Before the invasion, Russia's reserves were $634B. Sanctions immobilize about $313B. This leaves Russia with $146B in gold and about $107B in FX assets (largely yuan). 2/

Russia’s economy faces an extended period of stagnation. There was essentially 0 productivity growth post-2014; now it will turn negative due to sanctions and war. Russian economy will further suffer due to emigration and brain drain. 3/

Russia reports a record deficit of 2.4T rubles in 2023Q1 - 82% of the full-year budget target. December had a record single-month deficit of more than 4T rubles. Key drivers are revenue underperformance, notably oil and gas, and elevated expenditures due to the war. 4/

Oil and gas revenues for January-March are 45% below their level the last year. Russia is increasing its tax on oil. However, this is estimated to bring about 600B - not even close to cover Ts in lost revenues. 5/

EU embargoes on crude oil (Dec. 5, 2022) and oil products (Feb. 5, 2023) were delayed. But now together with Europe’s exit from Russian gas, over 50% pre-invasion exports are sanctioned. The sanction gaps are East Asian democracies as well as China, India, and Turkey. 6/

Russia was able to redirect crude oil to China, India, and Turkey. The exclusion of shipping services from the EU embargo allowed to keep Russian oil on the market. But Russia has had to accept heavy discounts. 7/

Sanctions succeeded in maintaining oil market stability while reducing Russian export earnings. Global oil prices have returned to pre-full-scale invasion levels. Russia’s inability to find alternative buyers for its gas decreased gas production. 8/

High prices and redirection to alternative buyers supported Russian exports. But total exports have weakened since 2022Q4 as energy prices moderated and additional sanctions took effect. In imports, Russia has not been able to replace EU and US trade. 9/

KSE Institute expects significant declines in oil and gas export volumes (-12.9%, -27.9%) as well as prices (-32.6%, -49.4%) in 2023. 10/

KSE Institute projects that lower export volumes and prices will cut oil and gas earnings in half this year (41% for oil, 64% for gas). The current account surplus will narrow to $63 billion. This is a problem because Russian budget assumes $123 billion surplus. 11/

@KSE_Institute

Sanctions are working. Slowly but surely. Let's add more. You can read the entire KSE Institute sanction chartbook and suggestions for further sanctions here kse.ua/wp-content/upl…

Thank you @KSE_Institute
@Nataliia_Shapo
@ben_hilgenstock @elinaribakova @JPavytska
12/12

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More from @Mylovanov

Tymofiy Mylovanov

@Mylovanov

Sep 14

Kellogg: If he [Putin] was winning, he’d be in Kyiv, west of the Dnipro, on Odesa, and he’d have changed the government. Russia is losing.

Losses are World War II scale — over a million dead and wounded. First-line units are gone. Tanks pulled from museums. 1/

Kellogg: Trump asked me in the Oval if Russia is winning. I said no.

I told him to ask his Chairman of the Joint Chiefs, Dan Keane. He said no as well. 2/

Kellogg: Use economic force. Seize oligarch money. Enforce sanctions hard. Shut down the shadow fleet in the Baltic.

Bottle up the Baltic Sea and you cut 70% of their traffic. Today we’re at 6/10 on sanctions but 3/10 on enforcement. 3/

Read 8 tweets

Tymofiy Mylovanov

@Mylovanov

Sep 14

Stubb: Putin failed all his goals.

He planned to take Ukraine in 4 days — it’s 4 years. He sought to divide the West — it’s more united than ever. He wanted less NATO spending — Trump raised it to 5%.

And Ukraine became very European and not Russian at all. 1/

Stubb: Russians have tolerated pain not only in the Soviet era but before, to a degree hard for the West to understand.

War may end when Putin no longer pays $80,000 “maternity packages” for dead soldiers or bonuses for military service. 2/

Q: Should Ukraine give up territory to end the war?

Stubb: I’m a Finn, so I won’t answer that.

Statehood rests on independence, sovereignty, territorial integrity. It’s a choice between Yalta’s carve-up and Helsinki 1975 accords. I’d prefer Helsinki. 3/

Read 7 tweets

Tymofiy Mylovanov

@Mylovanov

Sep 13

Q: Where is Russia going?

President of Finland, Stubb: It's not looking good. With the current regime and President Putin, I don't see a big change.

Nations that don't have a capacity to deal with their past have a very difficult time looking into the future. 1/

Stubb: This's imperialist DNA and an undertone in Russia that doesn't seem to go away.

Russia is built on empire. That's why Putin talks about the “Russkiy Mir,” the great Russia borders of the 18th cent, with one language, religion, and leader. 2/

Stubb: I'm not very hopeful about the future of Russia.

We thought that Russia and many other countries would just automatically revert to liberal democracy, but it didn't happen. 3/

Read 15 tweets

Tymofiy Mylovanov

@Mylovanov

Sep 13

Bosacki: Drones are instruments of terror that shattered homes in Ukraine.

2 days ago they tried to hit Polish homes, one in Wyryki, eastern Poland.

Russian representative claimed they were not Russian drones, but evidence shows parts with signs in Russian. 1/

Bosacki: Every Russian accusation turns into confession. For 1st time in history, UN Security Council met on Polish request.

On night of Sep 9-10, 19 Russian military drones from Ukraine and Belarus breached Polish airspace, violating borders of Poland, NATO, and EU. 2/

Bosacki: Russian colleague kept repeating the Orwellian phrase “alleged aggression,” which caused hundreds of thousands of innocent victims. He blamed a fascist regime.

We recall same rhetoric when Soviet Russia attacked Czechoslovakia 1968, Hungary 1956, Poland 1939. 3/

Read 6 tweets

Tymofiy Mylovanov

@Mylovanov

Sep 13

Rutte: Ukraine has a well-established defence industry and experience with drone interceptors.

At Joint Analysis Training and Education Centre in Poland, NATO and Ukraine work together, taking lessons. We make sure we apply latest insights and technologies to build posture. 1/

Rutte: General Grynkewich and I announce NATO is launching Eastern Sentry to bolster posture on the eastern flank.

It starts in coming days with assets from Allies including Denmark, France, UK, Germany. It adds strength, addresses drones, and shows NATO is ready to defend. 2/

Grynkewich: Eastern Sentry will be flexible and agile, with focused deterrence and defense when and where needed.

It adds enhanced capabilities, integrates air and ground defenses, info sharing. Allies stand with Poland, with forces from France, Germany, Denmark, UK. 3/

Read 4 tweets

Tymofiy Mylovanov

@Mylovanov

Sep 12

Lindsey Graham: Russia kidnapped 19,546 Ukrainian children. They took them from families, moved them to Russia. Teenagers get trained to fight against Ukraine. In 2025, this crime continues — Senator Klobuchar raised it first, and she was right.

1/

Lindsey Graham: In the 1990s, Ukraine gave up 1,700 nuclear weapons for security guarantees from Russia, the UK, and the US. Then Putin invaded in 2014 and 2022. Over a million killed or injured, millions displaced. 24 years later, we let our guard down.

2/

Lindsey Graham: We’re opening another front against Putin. China, India, Brazil buy cheap Russian oil and fund his war. We plan tariffs — choose between our economy or cheap Russian oil. If you prop up Putin’s war machine, you’ll pay a price.

3/