NextFin news, On Monday, September 15, 2025, Reuters reported that Russia has turned to barter trade as a method to bypass Western sanctions, exchanging commodities such as wheat for Chinese cars and flax seeds for building materials. This practice is taking place amid ongoing sanctions imposed by the US, Europe, and their allies in response to Russia's war in Ukraine and the occupation of Crimea.
According to Reuters, Russian companies and their Chinese counterparts have engaged in transactions where Chinese cars were purchased in China with yuan, Russian partners bought wheat with rubles, and then the wheat was exchanged for the cars. Similar barter deals involved flax seeds traded for household appliances and construction materials from China, as confirmed by customs declarations.
Other barter agreements include metals supplied to China in exchange for machinery, Chinese services traded for raw materials, and a Russian importer purchasing aluminum to settle accounts with a Chinese company. One barter deal was also identified with Pakistan.
The Russian Customs Service confirmed that barter trade is being conducted with various countries for a wide range of goods but stated that such deals represent only a small portion of overall foreign trade contracts. The Russian government and Central Bank declined to provide detailed comments on the scale of barter trade.
Reuters identified eight barter transactions involving physical goods based on trade sources, customs filings, and company statements. Maxim Spassky, Secretary of the General Council of the Russian-Asian Union of Industrialists and Entrepreneurs, described the growth of barter as a symptom of de-dollarization, sanctions pressure, and liquidity problems among trade partners, predicting that barter volumes will continue to rise.
The Russian Ministry of Economy published a 14-page guide in 2024 advising companies on international barter operations to circumvent sanctions and proposed creating a barter trading platform to facilitate such exchanges without international financial transactions.
Despite Russian President Vladimir Putin's claims of economic growth outperforming expectations compared to G7 countries, the Central Bank of Russia reports that the economy is technically in recession and experiencing high inflation. Barter trade has emerged as a response to secondary sanctions and restrictions such as the disconnection of Russian banks from the SWIFT payment system and warnings to Chinese banks against supporting Russia's military actions.
The US and EU continue to coordinate sanctions targeting Russia's oil and gas revenues, with the EU preparing its 19th sanctions package. Meanwhile, Russia's economy faces stagnation, prompting the increased use of barter trade to maintain foreign trade flows.
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