- Oil prices are on the rise for the fourth consecutive day on renewed Russian supply concerns and potential demand destruction in China.
- The EU is reportedly closer to announcing a potential full embargo on Russian oil following news that Germany has dropped its opposition to the measure.
- Russian oil production could fall by as much as 17 percent this year as Western sanctions weigh on the industry.
Germany – the bloc’s largest economy – has dropped its opposition to the measure, which is being considered for inclusion in the EU’s possible sixth package of sanctions on Russia following its invasion of Ukraine in February.
Members of the European Union are expected to agree on an embargo of Russian crude oil imports as early as next week, according to officials, in a move that would lay to rest a point of contention among its members.Such a measure has been discussed for weeks—with the United States adding pressure on the group to do its part to stop funding Russia with its payments for oil and gas supplies. The EU will continue to discuss the matter over the weekend, according to the New York Times, with the European Commission set to draft the finalized proposal to submit it to EU ambassadors for approval. Those ambassadors are scheduled to meet on Wednesday of next week, with final approval set to be delivered by the end of the week, anonymous EU officials told the New York Times. There is no indication of how inclusive or complete an embargo would be, but it’s clear that some type of embargo is on the horizon.
The EU gets a quarter of its crude oil from Russia. Analysts have suggested that if the EU instituted a full ban on crude oil, it would result in a significant financial hit and that Russia may be unable to find enough willing buyers to take the oil that normally heads to the EU. Such a financial hit could hamper Russian President Vladimir Putin’s ability to continue to fund the war in Ukraine. There are longer-term implications as well. If Russia fails to find an outlet for all of its crude oil in the wake of an EU crude oil embargo, Russia could be forced to slash production—production that may be unable to come back online.
NN: Russia is the worlds second largest crude oil exporter right behind Saudi Arabia.
Russia is the world’s largest exporter of oil to global markets and the second largest crude oil exporter behind Saudi Arabia. In December 2021, it exported 7.8 mb/d
Tell me how is this going to go. INSANITY!! Their is no replacement for lost Russian crude oil. If wells are shut down they are damaged. Often times they will never produce at the same rate. This is an example of the insanity of the world we live in. AGAIN I REPEAT THEIR IS NO REPLACEMENT FOR LOST RUSSIA PRODUCTION!