lAre Western sanctions against Russian oil effective? The issue is crucial, since hydrocarbon revenues cover, according to estimates, between 30% and 50% of the Russian state budget and largely finance its war against Ukraine. All the more so since sanctions are circumvented and must be constantly reviewed.
Since the Russian invasion of Ukraine in February 2022, the European Union (EU) has adopted 14 sets of sanctions, ranging from the confiscation of financial assets of oligarchs to a ban on the export of so-called “dual-use” products, which can be used in the manufacture of weapons. The EU also prohibits the import of crude oil and petroleum products transported by sea from Russia, and no European company must also insure or provide services to vessels carrying Russian oil purchased for more than $60 (55.56 euros) per barrel. , and 45 dollars if these are petroleum products such as fuel oil and gasoline.
“The long-term goal is obviously for the war to end and for Ukraine to be able to sign a peace agreement that suits it. But, in the medium term, we want, with sanctions, for the war to cost the regime as much as possible. [Vladimir] Putin”It is reported in Bercy, where the effectiveness of the embargo is praised, highlighting that the contribution of the energy sector to the Russian budget has decreased by 25% between 2020 and 2023.
However, the impact of sanctions is decreasing day by day. The differential between the price of Russian crude oil, that is, the price of oil purchased in Russian ports, and the price of Brent, that North Sea crude oil that serves as a global reference, continues to reduce. The gap went from 30%, when the sanctions were implemented, to 6% today. The Russians now refuse to sell their oil at deep discounts. The price of the Urals, which serves as a reference for Russian exports, for its part, has almost never fallen below $60 per barrel. Which suggests that the sanctions imposed by the G7, which includes, in addition to the EU, Germany, Canada, the United States, France, Italy, Japan and the United Kingdom, are no longer respected.
States more lax than others
If some measures produce long-term effects, such as the ban on the export of spare parts that makes the maintenance of military equipment difficult, the opposite is true with oil. According to the kyiv School of Economics, income losses are related to sanctions on black gold “have decreased considerably” in recent months, increasing from $8.6 billion to $1.9 billion between early 2023 and mid-2024.
You have 61.86% of this article left to read. The rest is reserved for subscribers.
