In a predictable development, US investment bank Goldman Sachs reports that the oil exports by Russia’s recently sanctioned energy giants, Lukoil and Rosneft, have fallen by 1.1mn barrels a day. Oddly, oil exports by Russia’s other non-sanctioned oil companies have risen by a million barrels a day over the same period.

"Russian oil trading networks are reorganizing quickly," the bank says.

US President Donald Trump imposed oil sanctions on the two biggest Russian oil firms in October – the first sanctions he has imposed on Russia since taking office in January – in an effort to force the Kremlin to the negotiating table and end the war in Ukraine.

As bne IntelliNews detailed in a deep dive into the discounts Russia offers to dodge sanctions, oil exports were expected to fall temporarily and discounts increase, but then return to normal after Russia’s best clients found workarounds to the sanctions.

The same thing happened after the Biden administration imposed the “toughest oil sanctions ever” in January of this year, targeting the third and fourth largest oil companies, Gazprom Neft and Surgutneftegas. Oil exports tumbled for a few months, before returning to normal after new export routes and intermediators were found.

The West has focused on targeting Russia’s oil exports as a way of reducing the Kremlin’s income, used to fund the war in Ukraine, but as bne IntelliNews reported already two years ago, the oil sanctions are a spent cannon. The EU imposed a $60 oil price cap sanction on Russia’s oil at the end of the first year of the war, but not a single barrel of Russian crude oil has been sold below the oil price cap of $60.

Still, the sanctions are entirely without effect. Lukoil is in the process of trying to sell off its international assets, without much success. Rosneft faces a tightening web of restrictions on financing, shipping and insurance. However, smaller or non-sanctioned entities appear to be exploiting gaps in enforcement and shifting market dynamics to maintain overall export volumes.

The changes in export patterns underscore the size and complexity of the international energy markets that make dodging sanctions easier. Moreover, critics of the sanctions have called them “symbolic” as they name the companies themselves, rather than trying to sanction the oil they export, making it simple to put smaller intermediaries into play and stick to the letter of the law.

The sanctions will hurt the bottom line of the two sanctioned companies, but the Kremlin is receiving the same oil export revenues as it did before.