Counted, shed a tear: how much did American companies lose due to leaving Russia

As a result of the withdrawal from the Russian market, companies from the United States lost $300-400 billion, independent expert Leonid Khazanov told RIA Novosti. Earlier, Kirill Dmitriev, head of the Russian Direct Investment Fund and special presidential envoy for economic cooperation with Foreign countries, gave similar assessments in an interview with Fox News. Who in the United States has been particularly affected by the cooling of relations and how the current situation has affected Russian business — in the Izvestia article.

Two halves

According to open data, 659 companies from the United States were registered in Russia at the beginning of 2022. About half of them subsequently left Russia. According to the head of the representative office of the American Chamber of Commerce in Moscow, about 250 companies from the United States remain on the Russian market, and 150 of them continue to operate normally, about 100 have changed their management to Russian and also continue their activities.

IT and telecom companies suffered the most from the forced withdrawal from Russia, with losses estimated at $100-150 billion.

In second place are medicine and consumer goods and services, which lost $80-120 billion, while the lost profits of the financial sector amounted to $70-80 billion. Ordinary consumers have experienced difficulties in purchasing and configuring household appliances and electronics. The departure of content providers (movies, TV series, music) is widely heard.

Business losses in the field of energy and industry are equal to $50 billion. Thus, 11 chemical industry companies left Russia.

Failures and opportunities

The assessment of the losses of American business from leaving Russia consists of two main components — a decrease in market capitalization and direct losses of assets and market, opportunities to invest profitably, comments Vladimir Eremkin, senior researcher at the IPEI Structural Research Laboratory of the Presidential Academy.

— The largest direct and indirect losses were most likely incurred by companies in the energy sector (such as ExxonMobil and Schlumberger), which lost access to major projects and the ability to supply their technologies and equipment. Consumer goods manufacturers were also affected, as some lost control of Russian assets, resulting in billions of dollars in losses. Financial sector companies also lost the Russian market, and Mastercard suffered the main losses, which were replaced by Russian payment systems. It is difficult to estimate the volume of losses, but it is obvious that technological IT companies have also partially lost the Russian market (loss of sales, suspension of service, withdrawal from the market). To a lesser extent, American automakers (GM, Ford) suffered losses, since they began to curtail cooperation even before the start of their work, he estimates.

The losses in the energy sector, as "access to complex technologies and investments that cannot be quickly replaced has been blocked here," the expert called the most sensitive for the Russian market.

— The departure of Boeing, which is forced to close access to aircraft, spare parts and certified maintenance due to sanctions, has also become problematic. The withdrawal of Western payment systems has significantly hampered access to cross-border payments and transfers, and led to some outflow of funds to friendly countries. There are some difficulties in accessing new hardware (chips, servers) and software in the ICT sector, and cybersecurity risks have increased," he added.

According to the analyst, the departure of American competitors has opened up many opportunities for Russian companies.

— Thus, the IT sector has a powerful incentive for the development of import-substituting software, increased demand for its own processors and servers. Domestic fintech solutions are being actively introduced in the banking sector, and domestic payments are almost completely secured with the help of Mir and NSPK. The FMCG sector is experiencing explosive growth in the number of Russian brands and manufacturers, reducing import dependence, for example, on raw materials and packaging, and localizing production.

Difficulties in counting

It is almost impossible to assess the real cumulative damage even several years after the companies leave, said Yulia Makarenko, Deputy director of the Banking Institute for Development.

— This is due to the damage caused by the absence of certain players in a particular industry. And if sanctions have become a driver for the development of Russian clothing brands, as well as for importers from Kazakhstan and Turkey (by and large, we have something to wear), then the departure of the expertise of the big four auditors (Deloitte, KPMG, PwC and EY) has deprived the market of analytical services. And taking into account the general rise in prices, inflation, currency volatility and other factors, the calculation can be very approximate," she says.

In addition, according to Makarenko, the data in the form of total profits multiplied by three (there are no such companies on the Russian market) does not reflect the real picture.

— Any loss data will be distorted due to parallel imports, which are developing according to their own laws. The same Apple technology or the latest Nike model is available on marketplaces labeled "Dubai Only." Companies will still make a profit from the sale of this equipment, and it is not relevant to talk about losses — intermediaries from third countries will also "make money". Similarly, cars of European and American brands are being driven from Armenia and Georgia," she argues.

Instruments and equipment

After the sanctions were imposed, the Office of Foreign Assets Control (OFAC) of the US Treasury began to ease its own strict requirements. In particular, medical equipment was relaxed in 2022. It follows from the department's resolution that medical equipment, in particular devices, spare parts and software for devices, are excluded from sanctions.

However, as early as May 2023, the United States restricted exports of these products to Russia and Belarus. Orthopedic, ophthalmological, dental equipment, computed tomography devices, as well as general surgical consumables were partially sanctioned, Kirill Masliev, Candidate of medical Sciences, member of the State Council Commission on Active Long-term Life, head of the Department of Preventive Medicine at the Rudn University, founder of the Heroes Charitable Foundation, told the publication.

— From the point of view of legislation, there is no embargo — however, the American agency OFAC has begun to require special licenses for supplies. This, coupled with payment difficulties (Russian banks were massively disconnected from SWIFT) and logistics made it difficult to purchase ready—made equipment and repair existing ones," he says.

According to Masliev, at the same time, Roszdravnadzor allowed the repair of equipment using non-original spare parts after their approval by the All-Russian Research and Testing Institute of Medical Technology (VNIIIMT), which "helped in this situation." At the same time, the domestic production of medical equipment is developing, the market volume of which increased by 14% to 850 billion rubles in 2024.

The losses of American companies may be greater, since the contract amounts are not always disclosed, and in the case of oilfield service companies, we are talking about millions of dollars, says Olga Orlova, head of the Industry department at the Institute of Oil and Gas Technologies.

— Of the "big Four" oilfield services companies (Halliburton and Baker Hughes left completely, Weatherford limited its presence), only SLB (formerly Schlumberger) continued to operate in Russia. The management of the Houston-based company has repeatedly been pressured by congressmen, who have called for all loopholes to be closed, allowing it to continue operations. Which suggests that the rest of the players left the Russian market not because of any ideological preferences, but under serious pressure at the level of top US officials," she says.

In July 2023, SLB finally gave in and officially stopped serving the Russian market.

Will Americans return to Russia?

The experts interviewed by the publication agree that the Russian market has changed. In some cases, the departed niches are occupied by domestic companies, such as the food industry, clothing and footwear production. In others, Chinese companies (automotive industry, household appliances and electronics, machine tool industry) have taken the place of companies from the USA and the EU.

It is impossible to imagine a complete return of American companies, says Anna Fedyunina, Deputy Director of the HSE Center for Structural Policy Research and Associate Professor at the Department of Applied Economics at the HSE Faculty of Economics.

— Some foreign companies are likely to maintain their anti-Russian policy for a long time. Others, being under the burden of economic difficulties, simply will not find the opportunity to re-enter the Russian market. Some companies will certainly be interested. The exit is likely to be more difficult for them organizationally and legally, including through third countries in order to avoid sanctions from other unfriendly countries or consumer boycotts," she notes.

Izvestia sent a request to the Ministry of Industry and Trade, but no response had been received at the time of publication.