The Indicator from Planet Money

Who's propping up Russian oil?

November 5, 2025

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  • Despite over 5,000 sanctions imposed by the U.S. and allies since the invasion of Ukraine, Russia's economy has not collapsed, largely due to continued international purchases of its oil and gas. 
  • Taiwan, despite facing a similar authoritarian threat from China, has become the world's largest importer of Russian naphtha, with its private sector, particularly Formosa Petrochemical Corporation, significantly increasing purchases to finance the Kremlin's war effort. 
  • Hypocrisy exists among U.S. allies, including the U.S. itself, as countries like Hungary, Slovakia, Turkey, and India continue to buy discounted Russian energy or refined products, undermining the broader sanctions regime. 

Segments

Sanctions’ Limited Effect
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(00:00:22)
  • Key Takeaway: Sanctions have caused cracks in Russia’s economy but have failed to stop the war due to widespread hypocrisy in energy purchasing.
  • Summary: The U.S. and allies have imposed over 5,000 sanctions targeting Russia’s energy and oligarchs to finance the war. These measures have resulted in higher taxes and interest rates for Russia and drained hundreds of billions from foreign reserves. However, the war continues because many nations are still buying Russian oil and gas cheaply.
Taiwan’s Naphtha Imports
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(00:03:09)
  • Key Takeaway: Taiwan is the world’s largest importer of Russian naphtha, a critical component for semiconductor production, despite its geopolitical alignment with Ukraine.
  • Summary: Taiwan faces a similar authoritarian threat as Ukraine but has no restrictions on buying Russian fossil fuels, leading its private sector to maximize profits. Formosa Petrochemical Corporation accounts for 90% of Taiwan’s naphtha imports, with purchases increasing sixfold since the war began, sending close to $2 billion to the Kremlin. This funding is equivalent to paying for 170,000 attack drones used daily in Ukraine.
European and US Allies
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(00:07:04)
  • Key Takeaway: While the EU has reduced Russian energy imports, holdouts like Hungary and Slovakia have increased them, and the U.S. still imports refined products made from Russian crude.
  • Summary: Former President Trump demanded Europe stop buying Russian oil, and the EU has drastically cut reliance, though Hungary and Slovakia are increasing imports. Turkey and India are also major buyers of Russian oil, leading to tariffs on Indian goods from the U.S. The U.S. itself spends over a billion dollars annually on refined products like gasoline and jet fuel processed from Russian crude in other nations.
Update on Taiwan Naphtha
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(00:08:43)
  • Key Takeaway: Following public reporting on the issue, the Taiwanese government stated that Formosa Petrochemical Corporation’s contracts for Russian naphtha are expiring and will not be renewed.
  • Summary: Taiwanese government ministers expressed concern that the reliance on Russian naphtha represented a national security vulnerability due to potential pressure from Beijing on Moscow. After the report detailing the imports was released, the government announced that the company’s contracts were ending. Europe aims to end Russian energy imports by 2027, while the U.S. has no stated plans to limit its current imports.