Tag: Kyiv School of Economics
U.S. Sanctions on Rosneft and Lukoil: Benjamin Hilgenstock Explains the Impact on Russia’s Oil Revenues
The United States has imposed its toughest sanctions yet on Russia’s energy industry, focusing on Rosneft and Lukoil. These are the country’s two largest oil producers. The measures aim to restrict Moscow’s access to global markets and increase pressure on the Kremlin’s war financing.
In a detailed Financial Times analysis, experts examined how these sanctions could reshape global oil trade. They may also deepen Russia’s fiscal strain as the government faces a tightening budget environment.
Benjamin Hilgenstock on Russia’s Budget Vulnerability
“The sanctions come at a time of heightened vulnerability for the Russian budget,” said Benjamin Hilgenstock, head of macroeconomic research and strategy at the Kyiv School of Economics Institute (KSE Institute).
He explained that energy revenues make up about one-quarter of Russia’s federal income. Moreover, these revenues have fallen by 20 percent year-on-year in 2025. Therefore, Washington’s new sanctions could further intensify financial pressure on the Kremlin and limit its ability to sustain long-term spending.
Market Reaction: Rising Oil Prices and Global Adjustments
The Financial Times report also looked at market reactions following the sanctions announcement. Brent crude prices rose by 9 percent, as traders assessed possible disruptions to Russian exports. However, analysts warned that while China and India may initially resist pressure from Washington, secondary sanctions could change their stance. Over time, refiners might diversify their oil supplies, testing Russia’s ability to maintain production and revenue.
Read the Full Analysis
To read Benjamin Hilgenstock’s complete commentary and the full Financial Times article, visit FT.com. In addition, explore the KSE Institute’s homepage for more insights and expert research.
Further Reading: Sanctions and Russia’s Energy Economy
Energy exports remain a cornerstone of Russia’s economy and a major source of geopolitical power. By targeting the oil and gas sector, sanctions aim to reduce state revenues and limit Moscow’s ability to wage war against Ukraine. For deeper insights, visit the Sanctions Portal Evidence Base to explore current research on energy sanctions and their impact on Russia’s economy.
Benjamin Hilgenstock on Closing Sanctions Gaps Against Russia
Despite several rounds of Western sanctions, Russian drones and missiles still include Western-made parts. In Deutsche Welle’s report, “Western parts in Russian drones: Are sanctions working?”, Benjamin Hilgenstock, a senior economist at the Kyiv School of Economics (KSE), explains why export controls have not fully closed the sanctions gaps against Russia.
Export Controls and the Rise of Complex Trade Networks
“Export controls on many of these goods were imposed right at the beginning of the major Russian offensive in the spring of 2022. Yet, many of these sanctioned components still reach Russia through complex trade networks involving intermediaries in countries like China, the United Arab Emirates, Turkey, and Kazakhstan,” Benjamin Hilgenstock, Senior Economist at KSE
According to Hilgenstock, many indirect trade networks operate beyond EU or U.S. jurisdiction. As a result, restricted technologies continue entering Russian markets. These supply chains often involve intermediaries and shell companies, which makes enforcement difficult. Moreover, they reveal weaknesses in global export control systems.
Closing Sanctions Gaps Through Stronger Oversight
Hilgenstock notes that sanctions have raised costs and slowed Russia’s access to advanced technologies. However, there are still gaps that could be closed. Hilgenstock believes manufacturers of restricted goods should face tougher due diligence obligations. In addition, he suggests the financial sector’s compliance model could guide improvements in export enforcement.
How Indirect Trade Enables Sanctions Evasion
The Deutsche Welle report shows that re-export routes through countries such as Turkey, Kazakhstan, and the UAE allow restricted components to return to Russia. Consequently, these sanctions evasion networks weaken the impact of Western policies. To counter this, Hilgenstock emphasizes the need for international coordination, real-time trade monitoring, and greater transparency in global supply chains.
Read the full article on Deutsche Welle for Benjamin Hilgenstock’s analysis of sanctions enforcement and export control challenges.
Learn More About Sanctions
Visit the KSE Institute Sanctions Hub to explore in-depth monitoring of international sanctions against Russia. The Hub maintains a consolidated sanctions database and provides detailed reports on the impact of sanctions on Russia’s economy. It also features analyses of sanctions effectiveness, revealing patterns of enforcement and circumvention, as well as position papers and sectoral reports offering expert insights into key industries and policy recommendations from KSE researchers.
Visit the SITE Sanctions Portal to gain insights into sanctions on Russia and its economic retaliation measures. This resource provides a detailed timeline and comprehensive evidence base that brings together data, analysis, and expert commentary. It helps researchers, journalists, and policymakers navigate the evolving sanctions landscape. The SITE Sanctions Portal explores the economic consequences of Western sanctions and Russia’s strategic responses.
Corporate Complicity: Global Firms Funded Russia with $20B in 2024
A new report by the KSE Institute and B4Ukraine reveals that many global corporations continued doing business in Russia throughout 2024. These companies paid $20 billion in taxes to the Russian government, indirectly helping fund the war. This corporate complicity has drawn widespread criticism for undermining sanctions and supporting aggression.
Global Business and War: A Dangerous Link
Since Russia’s full-scale invasion of Ukraine in 2022, the international response included economic sanctions and public pressure for firms to exit Russia. Yet as of mid-2025, only 12% of global firms had fully withdrawn. 1377 firms or 33% have officially declared that they are completely shutting down, or have announced they are temporarily reducing operations, but haven’t yet fully exited. A staggering 55% remain active in Russia, paying taxes, generating profit, and keeping operations running.
Many companies claim to have paused or scaled back operations. However, their tax contributions tell another story. In 2024 alone, foreign firms earned $201 billion in Russia and paid $20 billion in taxes—enough to fund more than one million soldiers based on Russia’s $18,400 recruitment bonus per soldier.
Why Companies Choose to Stay
Some firms chose profits over principles. The finance and consumer goods sectors led the way, with banks and brands like PepsiCo, Nestlé, and Mars topping revenue and tax lists. Despite early promises to leave, many companies either delayed their exit or quietly expanded. Others, like Mondelez and Coca-Cola, have been accused of masking their continued presence with rebranding or shifting operations to subsidiaries.
Key Research Findings on Corporate Complicity
- In 2024, foreign companies earned $201 billion and paid $20 billion in taxes to Russia.
- Only 12% of firms fully exited the Russian market; 55% stayed.
- U.S. and EU firms paid more than $3.8 billion in profit taxes combined.
- The finance and consumer sectors were the top contributors to the Russian war economy.
Western Values Undermined by Business-as-Usual
The report argues that continued business in Russia by Western firms directly undermines their governments’ aid to Ukraine. Companies headquartered in the U.S., Germany, and France are among the largest contributors to Russia’s tax base.
The report highlights that increasing numbers of foreign firms have stopped publishing their financial reports, a trend particularly noticeable among large corporations. Of the 100 largest foreign companies operating in Russia in 2021, 86 disclosed their financials in 2023. This number has halved in 2024 to just 43. The decision not to disclose financial statements may reflect an effort by companies to avoid further reputational damage linked to the scale of their economic support for the war effort.
Read the Full Report
Explore the full findings and detailed analysis by reading the complete report on the Kyiv School of Economics website. Additionally, you can view more policy briefs from the KSE Institute on the FREE Network’s website.
Learn More About the Russian War Economy and Sanctions
To learn more about Western sanctions and Russia’s countermeasures, visit the Sanctions Timeline. And for details on sanctions imposed on Russia and their effects, see the Evidence Base section of the sanctions portal. Explore more policy briefs on sanctioning Russia here.
OECD DevTalks: The Transformation and Reconstruction of Ukraine
The war in Ukraine, caused by Russia’s invasion, remains a profound humanitarian crisis with far-reaching economic and social consequences worldwide. In response, the Organisation for Economic Co-operation and Development (OECD) has strongly condemned Russia’s actions. Moreover, it is now advancing a new strategy to strengthen Ukraine’s recovery and reconstruction efforts.
The OECD’s work builds on a Memorandum of Understanding first signed with Ukraine in 2014 and renewed in 2021. Since then, the organisation has deepened its collaboration with Ukrainian partners to rebuild the nation’s economy and institutions. In addition, the OECD Development Centre plays a crucial role by providing policy expertise and data-driven analysis. It supports multiple sectors, including governance, innovation, and sustainable growth. As a result, these coordinated efforts aim to help Ukraine achieve long-term stability and resilience.
Webinar on Ukraine’s Economic and Social Transformation
On Tuesday, 17 May 2022, the OECD DevTalks series hosted a high-level webinar focusing on Ukraine’s economic and social transformation, both before and after the full-scale invasion. The event gathered leading economists, policymakers, and development experts to discuss:
- The state of Ukraine’s economy prior to 2022
- The impact of the war on social and economic structures
- Priorities for reconstruction and recovery
- The role of international support and cooperation
This discussion contributed to shaping a shared vision for Ukraine’s future, highlighting the resilience of its people and institutions amid ongoing challenges.
Distinguished Speakers
- Mathias Cormann, Secretary-General, OECD
- Vadym Omelchenko, Extraordinary and Plenipotentiary Ambassador of Ukraine to France
- Yuriy Gorodnichenko, Quantedge Presidential Professor of Economics, University of California, Berkeley
- Nataliia Shapoval, Head of KSE Institute & Vice President for Policy Research, Kyiv School of Economics
- Tymofii Brik, Acting Wartime Vice-President of International Affairs & Head of Sociological Research, Kyiv School of Economics
- Torbjörn Becker, Director, Stockholm Institute of Transition Economics (SITE), Stockholm School of Economics
- William Tompson, Head of Eurasia, Global Relations and Co-operation, OECD
- Ragnheidur Elín Árnadóttir, Director, OECD Development Centre
About OECD DevTalks
OECD DevTalks is a continuing series of expert panel discussions and blogs organized by the OECD Development Centre. Each session brings together global thought leaders to exchange ideas on sustainable development, inclusive growth, and policy innovation. For more #DevTalks – a series of online panel discussions, along with Development Matters blogs, follow the OECD #DevTalk page.
Disclaimer: Opinions expressed during events and conferences are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.