The EU’s partial embargo covers Russian oil brought into the bloc by sea, with an exemption carved out for imports delivered by pipeline following opposition from Hungary.
Attila Kisbenedek | Afp | Getty Images
Moscow could respond to European sanctions on Russian oil by seeking other buyers for its crude or cutting production to keep prices high. Its actions would have a global economic impact — unless OPEC intervenes.
EU leaders on Monday agreed to ban 90% of Russian crude by the end of the year as part of the bloc’s sixth sanctions package on Russia since it invaded Ukraine.
“The Russian response obviously will bear close watching,” Helima Croft, head of global commodity strategy at RBC Capital Markets, in a note on Tuesday.
Russia is the world’s third-largest oil producer after the U.S. and Saudi Arabia, and the second largest crude oil exporter behind Saudi Arabia, according to the International Energy Agency.
“What is going on now will change oil-natural gas trade into the future. Oil prices will not decline any time soon and the fallout of Russian sanctions will be felt for a few years,” said Hossein Askari, a professor at the George Washington University School of Business. “The U.S. should have used strong preemptive sanctions on Russia and been tougher with OPEC oil producers to increase oil output.”
Hunting for other buyers
Whether Russia manages to offload its sanctioned crude and how much it can sell would affect oil prices globally. Roughly 36% of the EU’s oil imports coming from Russia.
Mikhail Ulyanov, Russia’s permanent representative to international organizations in Vienna, said the country will look for other buyers for its oil.
“As she rightly said yesterday, #Russia will find other importers,” Ulyanov said via Twitter, referring to European Commission President Ursula von der Leyen.
“Whether those barrels find homes in India, China, and Turkey could hinge on whether the EU ultimately opts to target shipping and…
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