The State Department expects that Russia will lose half of its oil and gas revenues due to sanctions. The Kremlin reacted

Russia’s oil and gas revenues will halve by 2030, and sanctions will remain in effect for years to come. Such expectations were shared by US Assistant Secretary of State for Energy, Jeffrey Payette.

“We will have to provide it for the next years while Putin insists on this war,” the diplomat said in an interview with the Financial Times.

He added: “the purpose of the sanctions is to change Russia’s behavior and ensure that Putin cannot, in the event of peace … use three to four years to rearm and prepare his military for the third stage of the invasion of Ukraine.”

Corresponding forecasts regarding the decrease in Russia’s income from energy resources were previously voiced by the International Energy Agency.

In order to enforce the regime of restrictions on the trade of Russian oil, the US began to introduce sanctions against the so-called “shadow fleet”, which Russia uses for such supplies to bypass the Western system of transportation and insurance.

The Kremlin reacted to Payetta’s statements. Kremlin spokesman Peskov said that he has no doubt that the sanctions will last for many years and that the Russian government will take this into account when formulating its strategy.

Russia often says that the sanctions are not having the impact the West had hoped for. In an interview with the Voice of America, the famous American economist Anders Aslund noted that the sanctions limited the growth of the Russian economy by 2-3% and now the Russian economy is stagnating.

Because of the sanctions, Russia increasingly receives not dollars and euros for its oil and gas, but Chinese yuan and Indian rupees, which are not fully convertible currencies.

This, Aslund believes, is one of the factors why Russia has virtually no liquid currency reserves left. Russia’s foreign exchange reserves before the start of a full-scale invasion amounted to a significant amount – 600 billion dollars.

“Russia has no liquid currency reserves left,” says Aslund. “Approximately 300 billion dollars of Russian reserves were frozen by the West. Another 70 billion dollars were used by Russia. They have 103 billion dollars in yuan – it is unconverted and illiquid. They also have a large plus in their accounts with India, $20 billion in rupees. Also, $130 billion in gold is illiquid and difficult to use. If you subtract that from the official reserves of $577 billion, they have no liquid reserves left at all.”

In an interview with the FT, Payette indicated that further sanctions should be expected against those who help Russia transport oil to bypass the international system.

Earlier, Payette announced that the US would continue to help Ukraine during the winter. The United States has already provided Ukraine with more than $520 million in energy aid. Meanwhile, the US also has $500 million in projects under development.

“We are focused on how to ensure sustainability [енергосистеми] during this winter. Vladimir Putin tried to turn winter into a weapon and use winter as a tool to break the will of the Ukrainian people. I know that he will fail,” Payette said while answering journalists’ questions at a briefing on November 16.

US aid to Ukraine in the energy sector is currently focused on two key components, the official said. The first is help to Ukraine to ensure the stability of the energy system, in particular, this winter, given the expectation of Russian strikes on Ukraine’s energy infrastructure, the official added.