Sanctions War: EU Business Loses €100 Billion

The sanctions imposed by the West on Russia as a result of the armed conflict in Ukraine, as well as the corresponding retaliatory measures and embargoes by Moscow, have already cost European Union companies more than 100 billion euros. Between peace plans and various types of mediation, the war activities are heating up, and the bill for European business is threatening to grow even higher.

According to an analysis by the British economic and financial newspaper Financial Times, “a review of the annual reports and budget for 2023 of 600 groups and largest companies in the European Union shows that 176 companies recorded significant asset impairment, foreign exchange-related fees, and other one-time expenses as a result of the sale or closure of respective operations in Russia.”

Analysts emphasize that at the moment these are only “direct financial losses,” and the “total indicator” does not include indirect macroeconomic consequences of a bloody armed conflict, such as an increase in costs of energy and logistics following the mutual closure of the respective airspaces of Europe and Russia, as well as a sharp rise in prices for many types of raw materials.

The strategic sectors in Europe that suffered the most losses, write-offs, and encumbrances are the largest oil and gas industries. According to the Financial Times, “British Petroleum, Shell, and TotalEnergies alone reported combined spending of a staggering €40.6 billion.” However, the British newspaper notes that large losses were compensated by significant aggregate profits that large energy companies received thanks to rising oil and gas prices.

In addition, the losses of industrial companies, including European automakers that completely blocked their exports to Russia, one of the world’s largest car markets, amounted to 13.6 billion euros.

Nearly half (504 out of 1,034) of the foreign companies that have ceased operations in Russia have chosen to “keep the door open” so that they could return when the political situation allows them to do it trouble-free. According to Yale University (USA), many companies – primarily American, British, and Japanese businesses – provided for the right to buy back their own shares before leaving Russia.