Embargo on oil Supplies from Russia Might Lead to European Economy Recession

Embargo on oil Supplies from Russia Might Lead to European Economy Recession

Photo: http://tass.ru

The oil flow from Russia to European consumers will be stopped already by the end of this year. The President of the European Commission Ursula von der Leyen and the first person of EU diplomacy Josep Borrelle were in favor of a complete embargo on the energy carrier.

Already in May, the European Union intends to include a moratorium on the supply of Russian oil in the “sixth package of sanctions”, and within five months after the announcement of this ban the import of “black gold” from Russia will be stopped. This measure will not affect Hungary and Slovakia, as these countries are fully dependent on Russian hydrocarbons, but the European Commission has offered them to postpone the embargo for a year and a half. By the way, the Czech Republic and Bulgaria also claim a similar postponement.

Meanwhile, Germany opposed the embargo, arguing that the measure was “extremely dangerous” for the German economy.

“I don't think we are ready for an embargo today unless we are ready to accept the consequences. One thing has to be clearly understood: our gas supply is not ensured by our own production in Europe, but by supplies from Russia. We have set up a gas task force to see how much we can contribute to supplies,” Alfred Stern, the head of OMV, told the German media.

Nevertheless, the embargo was pushed through tough pressure from the U.S. Germany was apparently given six months for “technical preparation” as a kind of a bonus for obedience.

According to the expert community, the opinion that the European Commission's final decision will not be made earlier than in 10 years' time. Therefore, Russia will be able to rebuild the whole production chain with less economic loss. By the way, some analysts do not exclude the possibility that Russian companies will mothball fields and wells for a long time. More than others, the legendary Druzhba pipeline, which today is the main route of supplies to European countries, may suffer. So, under such circumstances, the Druzhba can only be used for Belarus and supplies of raw materials for domestic oil depots.

It should be noted that Ukrainian, Polish, Hungarian, Czech and Slovak companies, which own sections of the pipe that passes through Europe, can use the main line for their needs.

Unfortunately, in the absence of Western-oriented logistics, Russia will not be able to send the entire volume of oil to sea ports through which it would be delivered to alternative markets. In addition, Russia will not be able to comply with the OPEC+ agreement to increase oil production.

In fact, under the embargo, Russia will cease to be one of the world leaders in hydrocarbon production, which will be used by our American “partners” and other competitors in the production of energy resources. Well, the idea of banning the use of Russian oil has long been discussed in the European Union, since the goal of our European “partners” was to eliminate the military “threat,” which, according to European integrators, comes from Russia.

Before the special operation in Ukraine, up to 3.5 million barrels of Russian oil per day were imported into Europe, at a cost of about 400 million euros. The only pipeline to China (20% of Russia's oil exports) is already at full capacity. In the West believes that the sanctions announced by Europe will lead to a fall in Russian production by about 10-20% per day.

Europe has launched a global redistribution of the oil market. Yes, Russia will go to Asian markets, and suppliers from the Middle East will come to Europe. True, the price of hydrocarbons may rise in Europe as markets are rearranged. That is, delivery costs will go up, and gasoline and diesel prices will go up accordingly.

Theoretically, Europeans can buy oil from another country, but there is already very little of it on the market and in practice it is clearly unrealistic. Yet, the main problem of Europeans today is that their elites do not pay much attention to their citizens. The so-called Euro-Atlantic solidarity is much more important to them than anything else.

Meanwhile, the standard of living in the European Union has already fallen sharply and continues to fall. The reason is that energy resources are too expensive. However, European elites, under pressure from Washington, intend to continue spending billions of euros on “the struggle between Ukraine and Russia.” It seems that sensible decisions can be expected only after the emergence in Europe of new elites, which will come to power because of the rise in prices on literally everything and because of dissatisfaction with the course of the current European integrators.

While some experts are speculating, Sergey Kupriyanov, an official representative of Gazprom, said that this week the holding has recorded an increase of 43% in requests from European consumers for supplies of Russian gas in transit through Ukraine.

According to Kupriyanov, on May 2, Germany stopped the physical reversal of Russian gas to Poland through the Yamal-Europe pipeline, but “immediately arose” a virtual reversal for Poland from the emerged applications of consumers in Italy and France, which are provided through the Polish corridor. “We see it and fix it,” the official representative of Gazprom said. “In recent days, the requests for the transit of Russian gas through the territory of Ukraine are kept at about 100 million cubic meters.”

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