On the feasibility of an embargo from the EU on Russian energy exports, Dr Nakhle says that an embargo on these exports is feasible, but the question is when will it be effective. The EU’s division stems from the divergence in its members’ exposure to, and reliance on, Russian oil in addition to the availability of infrastructure that can allow those countries to switch to alternative supplies. Germany, who only a month ago described the embargo of the Russian energy exports as ‘a red line’, has changed its position and sensibly supports a gradual phase out of those imports by the end of 2022.
Dr Nakhle adds that the oil market is global, and it is difficult to trace every molecule especially when it comes to refined products. In this respect, some of the Russian oil may well find its way back to European market in one form or another.
In terms of natural gas, the European market is the most important market for Russia particularly given geographical proximity and availability of infrastructure. In the Russian Energy Strategy till 2035, Russia acknowledged that while the Asian market will become of greater importance for its energy exports, Europe will still be its biggest market.
“Sanctions and the Economic Consequences of Higher Oil Prices“, Christof Rühl, Apr 2022
“Energy Markets and the Design of Sanctions on Russia“, Christof Rühl, Mar 2022
“Where are we in the oil markets?“, Dr Carole Nakhle, May 2022
“The West and Russian Hydrocarbons: Towards an end to this dependency?“, Dr Carole Nakhle, May 2022
“Is Moscow turning to Asia?“, Dr Carole Nakhle, Apr 2022
“Putin demands gas exports to be paid in rubles, and US SPR release“, Dr Carole Nakhle, Apr 2022
“The EU’s 4th round of sanctions on Russia“, Dr Carole Nakhle, Mar 2022
“Can Europe completely cut its reliance on Russian energy supplies?“, Dr Carole Nakhle, Mar 2022