The main sanctions that the United States has put forward against Russia have affected the import of oil and gas. The UK is not far behind its Western neighbors and is gradually phasing out similar supplies, planning to switch to full self-sufficiency by 2023. At the moment, Europe has not yet given a complete ban on the supply of energy resources, but obliges its companies to refuse cooperation with Russia.
Which countries depend on Russian oil?
The United States has imposed a complete embargo on any supply of Russian oil. Because of this, oil from Russia can no longer be accepted in any American port.
Biden is confident that Americans will feel the impact of this decision, but he cannot do otherwise and will try to minimize the consequences.
Following the United States, the United Kingdom refused Russian oil, which also announced that towards the end of 2022 it would switch to full energy self-sufficiency. Such a statement only became a signal for European companies to refuse cooperation with Russian business as soon as possible.
What will be the consequences for Europe and the US?
The United States is not the main consumer of Russian oil and gas, which is why the consequences of sanctions on the economy of this country will be minimal.
At the same time, it is known that according to Rystad Energy, one of the Norwegian companies engaged in analytics, the United States receives approximately 100 barrels of oil from Russia per day per day. This figure is only 5% of the total Russian export of energy resources. However, this number rose to 8% last year.
How does Europe depend on Russian oil?
There are situations when Russian oil can be replaced by Arab oil with the help of extremely complex logistics and transport chains. Probably, oil from Iran and Venezuela could be returned to the world market as sources of oil. In the future, this would cause price diversification. In this case, Russian oil will go to buyers from India and China.
But prices cannot be left at the same level, and at the time of the announcement of sanctions against Russia, Brent oil costs more than $129 per barrel. Immediately after the news of the bans spread around the world, the price rose to $132.
According to analysts, oil price could rise to $200 if European countries also issue sanctions against Russian oil. It is reported that the cost will definitely not fall below the three-digit value. This is a great opportunity make money on oil right now.
According to Russian Deputy Prime Minister Alexander Novak, the price per barrel could reach a record high if the European Union and the United States do not take measures to resume imports of Russian oil. Europe has so far remained neutral on this issue.
Like prices, the rate of inflation around the world will also jump. All this is due to the increase in the price of gasoline, which will become unaffordable to most of the general population, and also seriously spoil the picture for global businesses.
The subsequent rise in gas prices will also lead to the fact that people will have to pay much more for everyday things - from food to "communal".
Reuters also notes that such a decision to abandon Russian oil is further ruining the global economy, which did not have time to recover from the global coronavirus pandemic.
How will the European Union behave?
Today, Europe is highly dependent on Russian oil and gas. It is enough to refer to the statistics, which show that 25% of oil supplies, about 40% of gas supplies and 45% of coal imports go to Europe from Russia.
As one of the alternative options for Europe, it is to apply for a purchase to other oil countries, but here there is a need for serious logistical and transport costs. At the same time, the situation with gas is extremely ambiguous, which requires specialized conditions for transportation over long distances.
At the time of writing, the European Union has not yet made a final decision to refuse imports of Russian oil and gas. However, a “plan outline” is already circulating on the net, clearly demonstrating how Europe will move to a new energy level, refusing to purchase oil and gas from Russia. The original plan was built up to 2030, but the current circumstances are forcing us to create closer benchmarks.
However, some companies, such as Shell and British Petroleum, have themselves expressed their desire for a total refusal to import Russian oil. Moreover, traders have begun to withdraw from trading in Russian oil and gas, fearing repercussions from sanctions on the banking sector.
With a zealous desire to abandon Russian oil and gas, the Canadian government came forward, but this step is very conditional. Since 2019, the country has not been engaged in the supply of energy resources from Russia.
Which European Union countries are most dependent on Russian oil?
Due to the start of a “special operation” in Eastern Europe, Germany immediately put the Nord Stream 2 on hold. Following this, many European companies expressed their desire to terminate energy cooperation with Russian companies. And if the United States has completely abandoned imports from Russia, then the countries of the European Union are still thinking and trying to build the most optimal solution for further actions. However, there are several EU countries that will definitely not be able to immediately refuse energy resources from Russia.
Below is a colorful infographic showing the percentage of energy dependence of each European country on Russian oil, gas and coal. The data is for 2020, even before the coronavirus pandemic.
It is worth noting that Greece, as well as Luxembourg, shows the greatest energy dependence. In third and fourth places are Cyprus and Malta, respectively. Immediately after that, it is worth noting Germany, which is the largest in terms of area, and the most dependent on energy resources.
It is impossible not to notice that the main supplies of oil, natural gas and coal are produced directly by Russian companies. At the same time, the amount of supplied energy resources clearly exceeds supplies from alternative sources such as Nigeria and Iraq.