Russia-Ukraine war: European Union sanctions begin to apply on the import of Russian oil

As a new punishment against Russia for the war unleashed in Ukraine on February 24, the new sanctions ordered by the European Union against oil import from an invading country.

It is a measure that seeks to continue weaken economically to the nation led by the Vladimir Putin regime, which invaded Ukrainian territory in the context of a war that has already killed thousands of people and is close to a year.

This time the penalty points to one of its most important marketssince Russia is the second largest exporter of crude oil in the world after Saudi Arabia.

In this sense, from now on they are oil purchases from Moscow banned by sea in the countries that make up the European economic bloc, as well as continental shipping or insurance companies that transport barrels to other countries outside the European Union if these are sold for more than 60 euros each.

Regarding the decision taken jointly by the officials of this political community, the Vice-President of the European Commission, Josep Borrell, explained the reasons why this new package of sanctions was agreed.

“On the one hand, we want reduce the income that Putin earns of oil, because with them it is financing his horrific war and all the atrocities that the Russians are committing in Ukraine”, he began from Brussels, emphasizing his intention to punish the Russian president for the invasion.

And he added: “On the other hand, we are in close dialogue with our transatlantic partners and we believe it we must not disturb international markets of the oil. That wouldn’t help us.”

How much do EU sanctions affect Russia?

The measure adopted by the European Union greatly weakens Russia given that in 2021 nearly half of those oil exports were destined for Europe.

Furthermore, the European Union is the largest supplier of ships and insurers in the transport of hydrocarbons. This is why it is important to prevent European tankers from allying themselves with countries such as China or India if they do not accept the imposed price cap.

A response to the announcement of the measure has already arrived from the Kremlin: they have assured that they will try ban the sale of oil below 60 euros even if that meant cutting production.

The measures could boost demand from China

In this line, the weight generated by Europe with these sanctions can serve to put pressure on the international market. And given that a very volatile price environment exists, analysts believe that if China recovers from the Covid-19 health crisis, demand for oil will recover and prices would go up again.

In this regard, the executive director of the International Energy Agency (IEA), Fatih Birol, said this Sunday that “oil producers may have to reconsider their pumping policies after demand recovery in Chinathe second largest oil consumer in the world.

China is the world’s largest importer of crude oil and the second largest buyer of liquefied natural gas.

“If demand increases sharply, if the Chinese economy recovers, then it will be necessary, in my view, for OPEC+ countries to review their policies” on production, Birol said.

DS