Breakingviews: Oil embargo will hurt Putin more than EU

After some hesitation, the European Union has decided to ban most Russian oil imports.

Replacing Urals crude with more expensive Brent will swell the bloc’s already red-hot energy bill. Still, the move will shrink Moscow’s most lucrative export revenue source and help stunt Vladimir Putin’s war machine.

The bloc’s new sanctions package, due to be formalised by EU leaders later on Tuesday, envisages an immediate ban on 75% of Europe’s imports of Russian crude.

This will rise to 90% by year end. The partial embargo is intended to allow naysayer Hungary and other landlocked countries to continue to import Russian oil via pipeline.

The uneven implementation of Europe’s most powerful sanctions tool is an eyesore. It will also result in a higher energy bill for already strained consumers.

The EU has been importing between 3 and 3.7 million barrels of Russian Urals oil per day, says Rystad Energy. Replacing 75% of that with $120-a-barrel Brent would imply an extra cost of at least $2 billion a month.

Yet the embargo is still significant. Russian exports of crude oil and condensate amounted to $110 billion, more than a fifth of Moscow’s entire commodity export proceeds in 2021.

Even though oil can be more easily shipped elsewhere than gas, Russia will struggle to fully replace those lost EU exports.

India has been buying record amounts of discounted Russian crude, but is already running its refineries above their official capacity, RBC analysts say.

China has yet to ramp up imports, but its economy is less buoyant following extensive Covid lockdowns. And the EU embargo will discourage non-Russian tankers from transporting Moscow’s crude.

Russia could earn at least $8.1 billion per month by exporting 3 million barrels per day to the EU at current Urals crude prices.

Rystad analysts say Moscow may be able to reroute at best 1 million of the barrels previously destined for the EU, implying that exports of 3 million barrels will quickly shrink to just 1.75 million barrels.

That means lost revenue of at least $3.4 billion per month in the initial phase of the embargo, or just over 40% of Moscow’s estimated monthly proceeds from EU exports, Breakingviews calculations show.

That loss could rise to at least $4.5 billion a month once the full EU ban kicks in. The EU oil embargo will hurt Russia more than Europe.

https://www.reuters.com/breakingviews/oil-embargo-will-hurt-putin-more-than-eu-2022-05-31/

EU needs to take a nem.con decision and put Putin where he belongs, they are wittingly and unwittingly funding Putin's war by continue buying Russia's oil

Why don't you put total embargo and see whio feels the heat the most. Mumu people. USA dey push unna anyhow. Winter is here already.

It will be too late when eu relise there mistake

US and NATO, world bullies, found their match Russia ��. The 2 have been known to bully weaker nations , I'm glad Russia is on their neck.

God bless putin God bless mother Russia.

seunny4lif:
When India, UAE, and China have increased Russia oil and gas import by X3.
Japan still refused to leave Russia-Japan oil and gas deal because it’s very important for Japanese economy.

I’m surprised that UAE imports Russia oil and gas

While "The United States is ready to assure transport and insurance companies in writing that Russian grain and fertilizer are not under US sanctions to help facilitate the export of these goods," said US Ambassador to the United Nations Linda Thomas-Greenfield today.

Russia now need to add fertiliser and grain to part of Rubles deal.

exactly the west bite more than they can chew

ken6488:
exactly the west bite more than they can chew

The funniest thing is that the eastern EU members that are parasites to EU funds, are the one calling for sanctions up and down.

If am Russia president, I will impose total trade embargo on EU and watch how price of oil per barrel hit €300.
Imagine Poland PM said Norway should shared Norway money made from oil and gas with Poland and Ukraine like real parasites

Price of fuel price at pump stations now throughout EU and Uk as of yesterday are running mad

��❗Biden administration opposes Russian asset confiscation, - The New York Times

The White House is afraid that the confiscation of Russia's assets frozen due to sanctions could undermine the US's reputation as an investment haven, the White House told the NYT.

The US is trying to see if the confiscation of Russian funds might encourage other countries to convert their reserves into other currencies and keep them out of American hands. #UkraineWar #Russia #Ukraine

seunny4lif:

The funniest thing is that the eastern EU members that are parasites to EU funds, are the one calling for sanctions up and down.

If am Russia president, I will impose total trade embargo on EU and watch how price of oil per barrel hit €300.
Imagine Poland PM said Norway should shared Norway money made from oil and gas with Poland and Ukraine like real parasites

AND U THING U ARE WISE LIKE THIS ?

Stale news!
Always some, most.... Why not entirely!

They have tried everything and failed instead the ruble is at all time record high.
If anybody will be hurt the most, it's European pockets and it's not even winter yet

They should just swallow their prides and drink Putin's sweet oil!

you can't punish the Punisher!

Hmmmm... Issues like this requires wisdom and careful planning so that innocent citizens wont suffer.

How well do you know about plate numbers in Nigeria and what they represent?

http://autoreportng.com/2020/04/abuja-number-plates-codes.html

Abuja Plate Number and Their Codes

Hmmm

Foolishness of EU. How do they think all these hypocritical sanctions will make Russia stop the war? Each time they want to roll out their self inflicting sanction, na so dem go hype am. Yet Russia keeps invading, Ukraine keeps being destroyed, more deaths in Ukraine, and more Ukrainians becoming refugees.

The only countries that want the war to end are India, China and those who have maintained Neutrality and call for dialogue on both sides. Not the West fueling the war. If they really love Ukraine, they should step in for them and fight Russia directly. This is what big brothers or defenders do. Not to give dog catapults to go and fight lion. That's suicide. Only motivational speakers do that

India and China is, already buying alot of Oil from Russian ever since the war began and sooner of later, Germany will need to power its Economy machine and they will go back to Russian gas.

The EU just acting childish.
You’ve tried different things,sadly it’s only working against you.
You ban Russia crude,but keep Russian gas.
Carefully reading through the article already suggest how easy it is for Russia to survive the sanction….
It means once China cancel the lockdown,Russia is fully back in business.
So why hurt yourself this much… when you can easily seek the peaceful option.
Talk to that little comedian to go prostrate for the European god(Putin)…
Win win for everyone,only USA might not be happy though.
Europeans will pay through their nose this time… Life no suppose hard like this,but here we’re.

Hmm

Story for the gods.

EU leaders . India is so cashing from "black gold" India buys oil from Russia on a discount and sells at a higher price to EU. Oil prices started to surge again, Russia sells less oil and makes more money. EU should let go, they are weak and toothless

....will hurt Russia more over the long run. China and India alone cannot absorb their production volumes. It has lost it biggest customers for good..they wont be returning even after the war with Ukraine ends

In the end america gains the most from this war..

People never learn.

Don't fccking trust the Americans.

Nigerians have an unhealthy relationship with western news. 9 times out of 10 when the west reports the Nigeria you know, they are wrong or uninformed, but you as a Nigerian will be trusting them to tell you about everywhere else.

Putin has clearly bitten off more than he can chew.

EU is ramping up the punishment and there is no going back anymore

Oil prices going up but nothing is being paid into Nigeria’s accounts

There was IBB’s gulf windfall
This is buhari’s Russian windfall


Either buhari is a big thief or his appointees are
Or most sadly, both. But probe this nonsense after he leaves office

hmm, no one wins. It will hurt Putin, what about the whole of Europe that will be gas short and will buy more expensive? This so called sanctions is supposed to be at the end of the year oh.