Energy Markets and the Design of Sanctions on Russia

Christof Rühl

In this commentary, published by the Center on Global Energy Policy of Columbia University, Christof Rühl, member of the Advisory Board of Crystol Energy and a Senior Fellow at the Center on Global Energy Policy, opines whether Europe and the US can and should impose further sanctions on energy from Russia, specifically on oil imports, and if so, how.

Some of the key highlights of the argument include:

  1. The nature of sanctions has changed. Energy sanctions against Russia are not ‘either-or’, with those not in compliance punished by secondary sanctions. They are more like ‘sanction picking’, with countries free to apply energy sanctions of their own choosing (or not – and no punishment for those who continue to use imports from Russia).
  2. The strategic target of sanctioning oil has to be to minimise the increase of the global price of oil which results from the disruption, while maximising the discount (and depressing the volumes) of the sanctioned oil, i.e. Urals.
  3. The voluntary and decentralised approach which is currently pursued has been successful and can be expanded further.

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