Asian markets still buying Russian oil after EU sanctions

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EU’s Industry experts say the groundbreaking decision to ban nearly all Russian oil imports to punish the country for invading Ukraine is a blow to Moscow’s economy, but the impact could be felt by higher energy prices and other countries willing to buy some oil. weaken.

EU leaders agreed late Monday to cut Russian oil imports by about 90 percent over the next six months, a dramatic move that was considered unthinkable a few months ago.

The 27 EU countries depend on Russia for 25% of their oil and 40% of their natural gas, and European countries, which are more dependent on Russia, are particularly reluctant to act.

Rescuers inspect an apartment building damaged in a nighttime missile attack in Sloviansk, Ukraine, Tuesday, May 31.

Rescuers inspect an apartment building damaged in a nighttime missile attack in Sloviansk, Ukraine, Tuesday, May 31.
(AP Photo/Francisco Seco)

European heads of state hailed the decision as a watershed moment, but analysts were more cautious.

European leaders agree to partial embargo on Russian oil imports in latest round of sanctions

EU Ban applies to all Russian oil by sea. At Hungary’s insistence, it included temporary exemptions for oil sent by Russia’s Druzhba pipeline to certain landlocked countries in Central Europe.

In addition to retaining some European markets, Russia could sell some of its oil previously shipped to Europe to China, India and other Asian customers, although it must Offer discounts.

“Now, for now, it’s not too painful for Russia economically because global prices are rising. They are much higher than last year,” he said. “So even if Russia offers a discount, it means it’s probably selling oil at about the same price as last year.”

“India has always been a willing buyer,” he noted, “and of course China is keen to buy more oil because both countries are getting deep discounts on global market prices.”

Still, Moscow has traditionally seen Europe as its main energy market, so Monday’s decision was the most significant effort yet to punish Russia for going to war in Ukraine.

“Sanctions have a clear goal: to get Russia to end the war and withdraw its troops and to agree with Ukraine on a sensible and fair peace,” German Chancellor Olaf Schultz said.

Residents wait for water at an apartment building damaged by an overnight missile attack in Sloviansk, Ukraine, Tuesday, May 31.

Residents wait for water at an apartment building damaged by an overnight missile attack in Sloviansk, Ukraine, Tuesday, May 31.
(AP Photo/Francisco Seco)

Ukraine estimates the ban could cost Russia tens of billions of dollars.

“The oil embargo will accelerate the countdown to the collapse of Russia’s economy and war machine,” said Foreign Minister Dmitry Kuleba.

Simone Tagliapietra, an energy expert and researcher at Brussels-based think tank Bruegel, called the embargo a “major blow”.

Matteo Villa, an analyst at the ISPI think tank in Milan, said Russia would now take a considerable hit, but warned that the move could ultimately backfire.

“The risk is that oil prices in general will go up because of European sanctions. If prices go up a lot, the risk is that Russia starts making more money and Europe loses the bet,” he said.

Like previous rounds of sanctions, the oil ban is unlikely to convince the Kremlin to end the war.

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Moscow has used the new sanctions to try to garner public support for the West, saying it is bent on destroying Russia.

Dmitry Medvedev, deputy chairman of the Russian Security Council and former president of Russia, said the oil ban was aimed at reducing the country’s export earnings and forcing the government to scale back social benefits.

“They hate us all!” Medvedev said on his messaging app channel. “These decisions stem from hatred of Russia and all its people.”

Russia does not shy away from detention vitality way to get it. Russian state energy giant Gazprom said it was cutting off gas supplies to Dutch trader GasTerra and Denmark’s Oster, as well as halting deliveries to Europe’s Shell Energy to Germany. There are other suppliers in Germany, with GasTerra and Oersted saying they are ready to close.

Gazprom had previously stopped supplies to Bulgaria, Poland and Finland.

On Tuesday, May 31, she found her granddaughter's doll in a destroyed house in Potashnya, a suburb of Kyiv, Ukraine.

On Tuesday, May 31, she found her granddaughter’s doll in a destroyed house in Potashnya, a suburb of Kyiv, Ukraine.
(AP Photo/Natasha Pisarenko)

Meanwhile, the EU is urging other countries to avoid trade barriers on agricultural products as Russia’s war increases the risk of a global food crisis.

Ukrainian President Volodymyr Zelensky has said that Russia has blocked the export of 22 million tons of Ukrainian grains, most of which are destined for people in the Middle East and Africa. He accused Moscow of “deliberately creating this problem”.

Russian seaborne oil accounts for two-thirds of the EU’s oil imports from Moscow. In addition to the EU cutting off such imports, Germany and Poland have agreed to stop using oil from the northern branch of the Druzhba pipeline.

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Agreeing on sanctions on Russian gas could be tougher because it makes up a larger share of Europe’s energy mix.

“The very loud and clear message that Moscow will hear is that it is almost impossible for the EU to reach an agreement to block gas because gas will not be replicated as easily from other sources in Europe as oil,” Weaver said.