Europe is hurting because Russia has cut down its natural-gas supply — but Russia is even worse off: study

Due to the war in Ukraine, Russia has slowed natural-gas supplies to Europe.

The importance of commodity exports to Russia far exceeds the importance of Russian commodity exports to the rest of the world, according to the experts.

Europe depends on Russia for 40% of its natural gas needs. Russia has reduced natural-gas flows to the Continent due to sanctions.

The Russian economy is hurt the most by shifting natural gas supply chains. The EU agreed to ban almost all Russian oil and coal imports by the end of 2022. Several European countries are trying to wean themselves off of Russian gas.

Commodities make up the majority of Russia's export revenue. In most years, these export earnings make up over half of Russia's total government budget.

Jeffrey Sonnenfeld is a professor at the Yale School of Management. Its findings stand in contrast to studies of Russia's economy that show it's holding up better than expected because of the robust takings from its oil and gas industry.

Putin is pivoting east to sell Russian energy, but buyers are driving hard bargains

Russian President Vladimir Putin is trying to make up for lower energy sales to Europe by selling them to other markets at a discount.

Russia's ability to negotiate with China and India has been hampered by its isolation from the west.

The authors said that these countries have not been shy to exploit pariah countries before, with China often driving discounted oil deals with countries such as Iran and Venezuela.

The price of Russia's flagship crude oil has fallen. According to data from the Russian Ministry of Finance and the Intercontinental Exchange, Urals was priced at a premium to international crude in the first two months of the year, but has since fallen to a discount.

Russia's position as a commodities exporter has "irrevocably deteriorated" due to the loss of its main markets, according to the Yale team.