The impact of EU-US sanctions on China-Russia energy trade in the post-2014 geopolitical context: a gravity model perspective
Abstract
Relevance. China-Russia bilateral energy trade increased from $29.9 billion in 2014 to $95.0 billion in 2023, yet existing research lacks systematic analysis of the differentiated impacts of sanctions imposed in 2014 and 2022 across coal, oil and natural gas markets.
Research Objective. This study systematically evaluates the differentiated impacts of EU-US sanctions imposed in 2014 and 2022 on China-Russia energy trade across trade flows and energy categories.
Data and Methods. Using China-Russia energy trade data from 1994 to 2023 (UN Comtrade), we construct an extended gravity model that incorporates governance quality and dual sanction variables informed by trade diversion theory. The model is estimated using Ordinary Least Squares with heteroskedasticity-robust standard errors, alongside stationarity and cointegration tests.
Results. The 2014 sanctions caused a 97% decline in energy trade, whereas the 2022 sanctions led to a 131% increase, illustrating a dynamic reversal. The effects of sanctions are asymmetric: 2022 measures suppressed exports while boosting imports. Sensitivity also varies across energy types: oil trade is the most vulnerable, natural gas remains resilient due to pipeline infrastructure and long-term contracts, and coal responds within capacity limits. Improvements in Russian governance and exchange rate appreciation positively influence trade, with stronger effects on imports.
Conclusions and Implications. This study provides new empirical evidence for trade diversion theory and sanctions economics, demonstrating that the impact of sanctions depends on infrastructure development, contract structures, and governance quality. To reduce the impact of sanctions, it is necessary to tailor risk prevention to each energy type, strengthen governance, and coordinate financial systems. The findings also highlight the need for Russia to diversify trade and reduce reliance on natural resources.
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DOI: https://doi.org/10.15826/recon.2026.12.1.004
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