The seven most advanced economies in the world, the G-7, are discussing imposing sanctions on Russian diamond exports — a complicated measure that could potentially hike prices for the luxury commodity.
Russia’s diamond exports have largely been spared from international sanctions following Moscow’s full-scale invasion of Ukraine in February last year. That’s despite calls to the contrary from Ukraine and some European countries as well as several rounds of measures targeting the Kremlin’s energy exports, banks and oligarchs.
In 2021, Russia raked in roughly $4.7 billion from diamond exports, according to data from the Observatory of Economic Complexity. That made Russia the world’s eighth-largest diamonds exporter. Diamonds are not commonly traded like oil or gold, but they represent a large market that goes beyond jewelry.
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The stones are also used for drilling, dentistry, computers, among others.
Some countries — such as Belgium, which buys a significant amount of Russian diamonds — want a “global approach” to Russian exports, as opposed to an EU-specific measure, to ensure the sanctions do not disproportionately hurt them.
“The debate has been going on for some time because there is a clear risk that Russia could simply divert its exports to non-participating countries,” Edward Gardner, a commodities economist at Capital Economics, told CNBC via email.