Russia returns to 90s post-Soviet barter trade as Western sanctions bite
Trade sanctions from across the Atlantic have Russia’s foreign commerce considering barter trade for the first time in three decades. Companies are reportedly swapping wheat and cars with the Chinese for construction materials to circumvent trade channels blocked by the West.
Barter trade in Russia was common in the 1990s after the Soviet collapse, which caused economic gaps, hikes in inflation and liquidity crunches. It has now returned amid unprecedented restrictions imposed on the former USSR capital due to its war with Ukraine.
The United States, European Union, and allies have slapped Russia with more than 25,000 sanctions in the last 10 years, specifically over its annexation of Crimea. More sanctions were added after the country’s full-scale invasion of Ukraine beginning in 2022.
According to several economists, the laws were meant to cripple Russia’s $2.2 trillion economy, isolate President Vladimir Putin, and weaken Moscow’s ability to finance its military operations.
Sanctions include cutting Russian banks from the SWIFT global payments system, banning access to Western capital markets and energy exports. Washington has also piled pressure on India, one of Moscow’s largest oil buyers, by imposing tariffs to New Delhi’s purchases.
Over the weekend, US President Donald Trump said his administration was prepared to renegotiate energy sanctions against Moscow, but only if NATO members also cease Russian oil purchases.
Putin ‘head-high’ in the face of economic slowdown
President Putin insists that his economy is “resilient” even without oil exports and several other trade restrictions by the West. “We must continue to find ways to defy sanctions in every possible form,” Putin told business leaders earlier this year.
As reported by Cryptopolitan, data from Russia’s central bank shows the economy slipped into a technical recession in the second quarter of 2025, as inflation erodes household purchasing power.
Barter trade could be the solution to the gap that financial institutions and exporters have been trying to close after trade pipelines with the EU and America were squeezed. Russia’s Economy Ministry published a 14-page “Guide to Foreign Barter Transactions,” in 2024, talking about how businesses could use it to skirt sanctions.
“Foreign trade barter transactions allow the exchange of goods and services with foreign companies without the need for international transactions,” the guide stated, citing “conditions of sanctions restrictions.”
China’s Hainan Longpan Oilfield Technology Co. reportedly sought to trade steel and aluminium alloys in August, asking for Russian-made marine engines. Reuters has identified at least eight barter deals in recent months through information from trade sources, customs statements, and company disclosures.
Trade officials argue it is next to impossible to quantify barter trade because it does not pass through conventional banking channels. But according to analysts, discrepancies between Russia’s official trade statistics count a $7 billion divergence between central bank and customs data in the first half of this year.
Questions asked of Russia’s trade balance
Russia’s foreign trade surplus with the EU and the US fell steeply in the first seven months of 2025. According to customs data, the surplus dropped 14% to $77.2 billion compared to a year earlier. Exports during the period fell by $11.5 billion to $232.6 billion, while imports rose by $1.2 billion to $155.4 billion.
Since January 2022, the United States has imported $24.5 billion worth of Russian goods, despite the sanctions regime.
Imports of Russian fertilizers rose slightly to $1.27 billion in 2024 from $1.14 billion in 2021, while enriched uranium and plutonium shipments from Beijing to the United States totaled $624 million in 2024, only marginally lower than in 2021. Palladium exports to America dropped to $878 million in 2024 from $1.59 billion four years ago.
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