Has Russia Ostracized Itself from Global Oil Market for Good?
Has Russia ostracized itself from the global oil market for good? According to Kpler’s Americas lead oil analyst Matt Smith, that’s impossible right now.
“Given some countries simply cannot extricate themselves from their energy ties with Russia and given how significant a player Russia is in the global energy market, it is impossible for them to be completely ostracized by the global community at this juncture,” Smith told Rigzone.
“While European countries may be feverishly planning to shift away from Russian energy, if there were some significant de-escalation in Ukraine and a diplomatic solution reached, it could be expected that European countries would be willing to take Russian energy in the interim while implementing their longer-term plan to pivot,” Smith added.
On March 15, the European Commission announced an agreement to adopt a fourth package of restrictive measures against Russia. This included a “far-reaching ban on new investment across the Russian energy sector, with limited exceptions for civil nuclear energy and the transport of certain energy products back to the EU”.
On March 8, U.S. President Joe Biden announced that the U.S. was banning all imports of Russian oil and gas and energy.
“That means Russian oil will no longer be acceptable at U.S. ports, and the American people will deal another powerful blow to Putin’s war machine,” Biden said in a White House statement at the time.
“This is a move that has strong bipartisan support in the Congress and, I believe, in the country,” Biden added in the statement.
On the same day, the UK government announced that it will phase out imports of Russian oil in response to Vladimir Putin’s invasion of Ukraine by the end of the year.
“The phasing out of imports will not be immediate, but instead allows the UK more than enough time to adjust supply chains, supporting industry and consumers,” the UK government said in a statement posted on its website at the time.
“The UK is working closely with the U.S., the EU and other partners to end our dependence on Russian hydrocarbons in response to Russian aggression in Ukraine, recognizing the different circumstances and transition timelines,” the UK government added in the statement.
Oil soared past $100 per barrel for the first time in years last month as Russian forces escalated a conflict with Ukraine.
To contact the author, email andreas.exarheas@rigzone.com
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