The head of the International Energy Agency recently said that Russia has lost Europe forever as the largest buyer of energy resources. When new packages of sanctions, restrictions and maximum oil prices come into force from day to day, business with the European Union and Great Britain will cease to be profitable for Russia.
In a few days, the EU embargo on Russian oil transported by sea will come into force in the EU. In early December, Turkey introduces additional requirements for tankers carrying oil through the Bosphorus. The UK has introduced its own embargo and a ban on the provision of services for the transportation of Russian oil, in addition, the G7 group introduces a price limit for this raw material.
These sanctions may indeed have the desired effect and weaken Russia
Although the first sanctions were imposed on Russia by international organizations and individual states shortly after it began its aggression in Ukraine, they have not yet brought the expected results. Yes, Russia is weakened, but it has been able to fight for more than 9 months in a row. This is because he has prepared well for the sanctions scenario and has accumulated a huge stockpile of gold and currency. The fact is that part of the financial reserves in foreign banks were instantly frozen, but, despite this, the “accumulations” were enough to arm themselves and send military equipment to the front.
The second reason why the Russian economy did not collapse is the multimillion-dollar contracts for the supply of oil to new buyers, primarily in Asia. India is importing more Russian oil than before, undermining the effect of EU sanctions. However, it is not surprising that Russia is looking for new markets when the existing ones are closed for it.
Restrictions will also apply to petroleum products
However, the huge restrictions on oil trade and the price ceiling may be a blow for which the aggressor did not have time to prepare.
“Russia will feel this blow,” Dr. Przemysław Zaleski, an expert at the Pulaski Foundation and Wrocław University of Technology, told money.pl. - Under the embargo in February, not only oil and world trade in it, but also products from it will fall.
Recall that the sixth package of sanctions includes: from December 5, Russian oil will not be able to enter the EU countries and the UK by sea. In addition, the EU countries introduced a ban on the import of Russian oil products from February 5, 2023.
As the head of the International Energy Agency (IEA) Fatih Birol recently stated, Russia has lost Europe forever as the largest buyer of energy resources. In turn, European Commission President Ursula von der Leyen believes that the oil embargo will reduce the import of this raw material from Russia to the EU countries by about 90 percent.
No agreement on price ceiling height
The restrictions do not end there, because along with the embargo, since December 5, there has been a mechanism of price restrictions - the so-called. price cap to be applied to crude oil from Russia sold by sea to third countries.
“It’s a smart mechanism that can work if properly calibrated.” We cannot ban Russia from exporting oil or its derivatives. However, we can require that its trade comply with the terms of the World Trade Organization, said Dr. Zaleski.
There is no price cap agreement yet. Some countries want to set it at $62-70. per barrel, while others, including Poland, argue that the level is too high.
A high threshold is preferred mainly by countries that receive huge incomes from the sea transportation of Russian oil. These are Cyprus, Malta and Greece. The Polish Economic Institute reported that from March to October of this year, tankers under the flags of the EU countries (Malta, Greece, Cyprus and Croatia) transported a total of 405.6 million barrels of Russian oil. For such countries, price cuts would create an obvious gap in the budget.
Source: Wprost
