Editor’s Note
Russia’s dominance in the global diamond trade, as detailed in this analysis, faces mounting challenges from international sanctions and shifting market dynamics. While its current market share remains significant, the pressures on this key industry underscore the broader economic realignments taking place.
Russia is the world’s leading diamond producer. In 2024, the Kimberley Process estimated that Russian diamonds, mostly mined in Siberia, particularly in Yakutia, accounted for 35% of the global market, double that of its main competitor, Botswana (17%). The global diamond market is worth approximately $10 billion annually.
However, sanctions imposed on Moscow since 2022 threaten Russia’s dominance of the diamond market. Nearly all (around 90%) of Russian diamonds are produced by Alrosa, a state-owned mining company that extracts the equivalent of 40 million carats of diamonds annually. Although a global market leader, before the war, almost three-quarters of its sales were concentrated in G7 countries. Since 2024, Russian diamonds have been subject to an embargo in the European Union and the G7. After leaving Antwerp, the world’s diamond capital, Russian companies have moved to Dubai or Hong Kong.
The loss of the European market, coupled with the drop in the price of Russian diamonds last year, contributed to a 25% contraction in Alrosa’s revenue during the first half of 2025. The company’s earnings before interest and taxes (EBITDA) plummeted 42% year-on-year, while its net debt multiplied tenfold, from 61 billion rubles (€700 million) to 6.34 billion (€70 million) last year.
The Russian Ministry of Finance announced at the end of October its intention to purchase diamonds from Alrosa, likely for several tens of millions of dollars. The transaction, which should go through Gokhran, the institution responsible for managing Russia’s National Fund of Precious Metals and Precious Stones, is expected to take place before the end of the year. Prior to the Russian state purchasing the equivalent of $100 million in diamonds from Alrosa in November 2024, the last transaction of this kind dated back to 2012.
Despite the embargo, some Russian diamonds—almost all of them cut in India—manage to be sold in European and North American markets. However, after postponing it twice, following the decision made by the G7 at the end of 2023, the European Union is expected to implement its traceability mechanism from January 1, 2026, which will allow tracking the origin of rough diamonds throughout the entire supply chain.
Russia is not the only producer affected by the crisis the diamond market has been experiencing for several years. Alrosa expects global production to reach its lowest level in 20 years this year. However, the company’s situation is aggravated domestically by the high interest rates of the Central Bank.