New York (CNN Business)Europe and the United Statesban Russia's oil importsand block important ones The Kremlin's source of income. However, the plan to hurt President Vladimir Putin and force him to reconsider the war in Ukraine did not work.
Russia earns as much money from energy exports as it did before the invasion in late February. Meanwhile, inflation is skyrocketing globally, increasing political pressure on leaders such as US President Joe Biden, British Prime Minister Boris Johnson, and French President Emmanuel Macron.
"There are tools available to chase Russia, but it costs a lot directly to consumers in the US and Europe," said Robert Johnston, Deputy Senior Researcher at the Columbia Global Energy Policy Center. I am saying. .. Imposing sanctions on countries that continue to scoop up large amounts of Russian crude oil, such as
"When the market needs to work reliably, it distorts the market and there are too many workarounds," Johnston said.
Russia continues to cash out at
The US, UK and Canada have announced a ban on Russia's oil imports. More importantly, Europe will follow Russia's oil imports at sea, given its long-standing reliance on Russia's energy supply. Brock says the ban will apply to 90% of Russia's oil imports by the end of the year.
European customers have already withdrawn. Russia's oil exports to Europe fell to 3.3 million barrels a day in May, down 170,000 barrels a day from the previous month, according to the International Energy Agency.
However, increased exports to Asia helped to make up for most of these losses. For the first time, China has seen imports reach 2 million barrels per day, taking advantage of significant discounts. India's imports are also skyrocketing, reaching nearly 900,000 barrels per day in May.
Russia sells barrels of Urals crude oil at a price about $ 35 cheaper than the last Brentglobal benchmark, which traded near $ 113 per barrel. However, it is still making a lot of money this year as prices soared due to the pandemic and aftershocks of the war.
According to the IEA, Russia's oil export revenues increased $ 1.7 billion in May to about $ 20 billion. This is well above the 2021 average of about $ 15 billion.
"Russians are still getting pretty good prices," Johnston said.
"We expect them to speak, how can we take steps to further reduce Russia's energy income?" Said one source. "And how do we do this in a way that stabilizes the global energy market and reduces the turmoil and pressure we have seen?"
The remaining tools.
Still, non-profit Global Witness campaigner Mai Rosner said Western countries to give market participants time to come up with creative skirt methods if there was a delay. Ruled that further steps were needed to quickly withdraw Russian oil from the market.
"These fragmentary sanctions leave a loophole for the fossil fuel industry to take advantage of," Rosner said.
The United States, with the support of Europe, may enact so-called secondary sanctions on third-party countries that continue to do business with Russia, similar to Iran and Venezuela. there is. The US government does not exclude this.
However, such a move causes so much confusion that experts consider it unlikely.
According to DWS Commodity Portfolio Manager Darwaken, if China and India have to find replacement barrels, oil prices can easily exceed $ 200 per barrel.
"It's hard to see a world where the United States imposes sanctions on Iran, Venezuela and Russia at the same time," Johnston said. "Oil must come from somewhere."
Biden says that fighting high inflation for the first time in 40 years is a top priority prior to the November midterm elections. I'm emphasizing.
Capping the price of Russian crude oil is one of the solutions that has been posed. That means Russia is not completely separated from the market, but it will be forced to sell oil at prices so low that it cannot be profitable.
Price caps will "push Russia's oil prices down and Putin's income down, while allowing more oil supplies to reach the global market," Treasury Secretary Janet Yellen said. Said last week.
“I think the more complex the system, the more likely it is that challenges will arise,” says Kung. "The market system works because it's so simple in a way. It's very efficient."
Western governments increase supply or raise prices and demand begins to fall. You can also try to relax the constraints by doing so. Neither is a simple calculus.
Fuel prices can be very high, and in the event of a global recession, energy demand can fall and prices can begin to fall naturally. However, it is very painful and involves unemployment and financial damage, especially for low-income families.