The art world’s response to Russia’s war

April 4, 20224 min read
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Key takeaways

  • The international art market has responded to Russia’s war against Ukraine with sanctions and swift condemnation.
  • Russia has long seen art as a soft power with Putin heavily involved in the art market ~$400M and $2B in his personal collection.
  • Russia’s priceless Morozov collection is currently on view in Paris, with many wondering if France will return it. 

As Russia’s war against Ukraine proceeds into its fifth week, the world continues to deal with the consequences of Putin’s unprovoked aggression. The international art market has begun to respond by exercising pressure where it can. These pressures are impacting collectors, auction houses, and art market participants throughout the globe. 

In the early 2000s, Russian collectors became a significant force in the market. In 2008, oligarch Roman Abramovich, owner of the investment company Millhouse LLC and the Chelsea Premier League football club, as well as the founder of Moscow’s Garage Museum of Contemporary Art, purchased Lucien Freud’s Benefits Supervisor Sleeping, 1995, and Francis Bacon’s Triptych for a then-record $33.6 million and $86.3 million, respectively. According to the Art Newspaper, Abramovich is now on the list of individuals sanctioned by the United Kingdom, alongside Alisher Usmanov, a close ally of Putin’s who is famous for having stopped a 2007 auction at Sotheby’s by buying the entirety of Russian musician Mstislav Rostropovich’s collection for £25 million. Usmanov later donated the works directly to one of Putin’s palaces. Another oligarch under sanctions from the EU and the UK, Petr Aven, is known for his large collection of Russian avant-garde art and Latvian porcelain. In response to the sanctions, London’s Royal Academy of Art removed Aven from their board. Similarly, Vladimir Potanin has resigned as a trustee at the Guggenheim Museum.

Putin’s possible $2 billion collection

Putin himself has also been directly involved in the art world. In 2015, Vladimir Putin received a gift of more than one thousand artworks, valued between $400 million and $2 billion. Though the contents of the gift have never been confirmed and their whereabouts are unknown, the trove allegedly includes works by Velazquez, Rubens, and Michelangelo. At Paris’s Fondation Louis Vuitton, an exhibition of the $2 billion Morozov Collection, currently on loan from Russian state museums, is one of the most popular museum exhibitions in French history; Putin wrote the introduction to the catalog. Though the works were meant to travel back to Moscow in April, their fates are now unclear due to the new restrictions on travel to Russia. The war also has more general consequences for the movement of artworks. According to Fritz Dietl of the art storage company Delaware Freeport, carriers that used to move through Russian airspace on their way to Asian art hubs must now take longer, more circuitous routes, leading to increased shipping costs and fuel consumption.

Additionally, many nations have tightened “know your customer” laws, which require companies to identify the ultimate beneficiaries of sales. United States sanctions leveled against all sectors of the Russian economy have made it illegal to do business with many of the country’s billionaires and millionaires, some of whom count artworks among their assets, and have contributed to tanking the value of the ruble. And Western nations’ removal of five major Russian banks from the Society for Worldwide Interbank Financial Telecommunications has barred them from making transactions across international borders. Meanwhile, according to Artforum, Christie’s, Sotheby’s, and Bonhams have all canceled their sales of Russian art planned to take place in London this June, and Sotheby’s has closed its Moscow outpost.

Hours before Phillips’ March 3rd auction of twentieth-century and contemporary art in London, the auction house’s CEO, Stephen Brooks, issued a statement of unequivocal condemnation of the invasion of Ukraine and announced that all proceeds from the evening auction would be donated to the Ukrainian Red Cross. Doing so apparently shielded Phillips from a potential boycott as a result of its close ties to Russia, the London sale achieved a total of $40 million, with 95% of the lots selling, and $7.7 million was donated to the Ukrainian Red Cross. On May 18th, Phillips will host its evening auction of twentieth-century and contemporary art, leading its sales with Jean-Michel Basquiat’s 1982 Untitled painting of a horned figure. No doubt, the market will be watching this one closely.

Despite the uncertainty that Russia’s invasion of Ukraine has introduced, recent auction sales continue to demonstrate a high level of confidence in the art market. Both Sotheby’s and Christie’s had record-breaking auctions in March 2022, besting a very strong 2021 and demonstrating great resilience in the art market. Barron’s recently reported that sales by dealers amounted to approximately $34.7 billion in 2021, increasing 18% year-over-year, and public sales by auction houses (excluding private sales), reached approximately $26.3 billion in 2021 (an increase of 47% from 2020). These figures show a clear and increasing demand amongst collectors and investors, fueling a boom in the art market. Learn more about how you can invest in many of the same leading and emerging artists behind this market growth with Yieldstreet’s Art Equity Fund III

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