S8 Ep131: Sanctions Hit Russian Economy Hard as Middlemen Charge Massive Premiums for Imports and Demand Huge Energy Discounts — Michael Bernstam — Bernstam details how countries including China and Turkey exploit Russia's economic isolation through sanctions. Chin

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John Batchelor

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🗓️ 27 November 2025

⏱️ 9 minutes

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Summary

Sanctions Hit Russian Economy Hard as Middlemen Charge Massive Premiums for Imports and Demand Huge Energy Discounts — Michael Bernstam — Bernstam details how countries including China and Turkey exploit Russia's economic isolation through sanctions. China demands oil discounts of up to $19 per barrel while simultaneously charging an 87% premium for manufactured goods exported to Russia. This arbitrage mechanism has contributed to a severe recession in Russia's civilian economy (5.4% contraction). Russia has increasingly relied on gold reserves to cover government budget deficits and sustain essential spendi32ng.
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Transcript

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0:00.0	This is CBSI on the world.
0:07.3	I'm John Bachel.
0:08.2	Michael Bernstein, my good colleague at the Hoover Institution,
0:11.0	watching the sanctions regime against the Russian aggressor in Ukraine.
0:15.6	The negotiations are underway elsewhere.
0:18.5	Economies, however, are not waiting for negotiations to either contract
0:23.2	or change direction. That is especially true in China. We read from the Financial Times.
0:30.8	Chinese exporters have been raising prices for Russian military industrial buyers,
0:35.6	exploding the Kremlin's reliance on their supplies.
0:38.7	As Western sanctions restrict imports, new research has revealed.
0:43.9	Michael, I come to you because when I read this item, it reminded me how you, in the first
0:49.1	year of the war, identified the middlemen as quite happy about the trade that was going on in oil.
0:57.2	They took a piece of the action every time there was a transfer from the shadow fleet to China
1:02.2	or the shadow fleet to India. However, this item just published in FTE suggests that's going on
1:08.7	in all directions, not just energy. Good evening to you, Michael.
1:13.0	And good evening to you. And it goes on in imports and goes on in exports, equally.
1:19.1	Wherever, people are entrepreneurial, people are enterprises all over the world. Poor country
1:24.8	suspicion. And whenever they see an opportunity, they see that.
1:29.3	And you can't blame them.
1:30.9	So the war and the sanctions have been a terrible tragedy for the Russian people, for the Ukrainian
1:37.9	people, and a boon for enterprising people in all neighboring countries.
1:42.9	And in all countries countries they're either
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