Alexander Firanchuk and Olga Ponomaryova explained why the strong ruble did not cause imports to grow, while exports shrank

“The main reason for the decline in the value of exports is the lower world prices for oil and other minerals on the global market,” said Alexander Firanchuk, Senior Researcher at the Gaidar Institute’s International Trade Department. “Taking into account that the dynamic of oil futures quotes affects export prices with some lag, the situation with the value volumes of exports will be somewhat worse by the results of May and June due to lower quotes in April-May, after which the situation may start to improve.

The exchange rate of the national currency has a stronger impact on exporters of highly processed industrial goods, which take a small share in Russian exports — currently about 5%. In general, Russian exporters have long been accustomed to working in the environment of extremely high volatility of the ruble exchange rate, and this factor is taken into account when planning export activities. At the same time, the basis of Russian exports is fuel, primarily oil, while the volume of oil exports is linked to the OPEC+ deal on production quotas, which are now being raised.

There are signs of a decline in coal exports, the supply of which to foreign markets at current prices is losing profitability.
The growth of exports of chemical products (+19.6%) and metals (+13.9%) is in good agreement with the dynamics of world prices for fertilizers (+11%) and basic metals (+8%) according to the World Bank", — said the expert.

Speaking about the weakness of import growth dynamics, Alexander Firanchuk drew attention to the machinery and equipment industry. “Despite the significant strengthening of the ruble — the real effective exchange rate was 11% higher than in January-April 2024 — imports showed only a slight increase (+1.8%), which is atypical. In quiet years, in response to the ruble strengthening, imports increased by a comparable amount. At the same time, while imports of machinery and equipment showed a slight decrease (-2.6%), imports of other goods increased (+6.3%).

Consequently, the current dynamics looks weaker than one could suppose due to the slowdown in demand for machinery and equipment. The increase in the cost of borrowed funds has a stronger impact on the demand for them, as machinery and equipment are more often purchased for investment purposes and on credit funds (the key rate in January-April was 5 percentage points higher than a year ago). In addition, the fall import of cars in advance of the increase in the recycling fee has an additional effect, which probably led to overstocking of the market," the expert said.

“The dynamics of the trade balance, as in previous years, is primarily determined by changes in prices for crude oil and other key Russian export products. Imports, meanwhile, remain a more stable component. Therefore, it is more appropriate to discuss various price scenarios rather than specific figures. The winding down of the global trade war started by the Trump administration allows us to expect oil prices to return to the level of about $70 per barrel," predicted Alexander Firanchuk.

Olga Ponomaryova, an expert at the Economic Policy Foundation, emphasized that the general trend of lower oil prices has been observed over the past year with a temporary recovery in early 2025. “After the US President Donald Trump’s announcement of tariffs in April, the cost of futures for benchmark Brent crude oil moved from a range of $70–75 to $60–65 per barrel, with prices fluctuating between $78–80 in the first half of last year," she said. For the main Russian export grade Urals, the dynamics are similar, but in lower intervals, taking into account the discount. According to the Ministry of Economic Development, the average price of this brand fell from $67.7 per barrel in January to $54.8 per barrel in April," — said the expert. She also drew attention to the decline in food exports by 15% year-on-year. Olga Ponomaryova explains this by a steady downward trend in prices on world markets, including wheat, oils and oilcakes.

According to the expert, the demand for all imported goods depends on the monetary policy. "Tight monetary policy restrains not only purchases of enterprises, but also consumer demand for foreign durable goods. On the one hand, the high cost of loans plays a role, and on the other hand, a significant part of liquidity goes into various financial instruments, rather than into consumption and investments related to imports," said Olga Ponomaryova.

The expert emphasizes the volatility of economic factors affecting the configuration of the oil market. "So far, the US trade policy restrains demand, and OPEC+ decisions to expand production put additional pressure on prices. But everything may change when the delay on Trump’s “reciprocal” tariffs expires in July — the duty regime may be adjusted, for example, due to the conclusion of trade deals and recognition of the illegitimacy of tariff measures. Only the sanctions factor remains stable for Russian oil — already in June the EU plans to expand restrictions again. According to the forecast of the Ministry of Economic Development updated in April, the average annual price of Russian oil in 2025 will amount to $56 per barrel. In May, Urals cost an average of $54.8 per barrel.

Taking into account the above factors, by the end of 2025, we can expect a slight reduction in the trade surplus by 3–5% year-on-year, to $140–145 bn. The decline in the trade balance will create conditions for the ruble to weaken. Declining exports will reduce the supply of currency, while expanding demand for imports will increase demand. In addition, Russians will start buying foreign currency in connection with the onset of the vacation season," — said Olga Ponomaryova.