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EU Considers Full Embargo on Russian Oil

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A complete embargo on oil imports from Russia is brewing in the corridors of Brussels, or so warns the French Finance Minister, Bruno Le Maire, who said on Europe 1 Radio: “I hope that in the weeks to come we will convince our European partners to stop importing Russian oil.”

The announcement comes just a week before the second round of the French elections, where Macron is ahead of his rival Marine Le-Pen. Everything seems that the embargo will take place after the elections, as an increase in the price of gasoline, energy and fuels could be electorally unfavorable to Macron.

Despite Western attempts to block Russia’s energy production, Russian oil and gas continue to flow into the market, and even the measures have counteracted and driven up the price of a barrel of crude oil.

Russian oil exports have been surprisingly resilient to Western sanctions, so much so that Russia’s current account, which accounts for exports and imports of goods and services, is at record highs.

The Russian government expects to earn up to $9.6 billion from oil sales in April, according to Russian finance ministry estimates. According to Bloomberg’s estimates, Russia could earn up to $321 billion from oil sales this year if prices continue to rise.

Russia continues to have plenty of buyers for its crude, starting with India, which has bought more than 13 million barrels from the Slavic country since the invasion of Ukraine began. India’s purchases of Russian crude oil increased considerably compared to 2021 when it bought 16 million barrels from the Kremlin in the whole year.

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On the Chinese side, although its refineries have paused the approval of new Russian oil orders, they continue to respect the contracts sealed prior to the invasion of Ukraine.

Even Europe continues to make considerable payments to Russia for its oil. The European Union exports up to 27% of the crude oil it consumes from Russia. Despite the conflict in Ukraine, the European energy sector has not stopped buying oil and natural gas, yet several Western companies have stopped buying commodities from Russia, or have canceled their existing contracts or projects with Russian state-owned oil and gas companies.

According to Ukrainian economist Oleg Ustenko, an advisor to President Volodymyr Zelensky, Russia continues to receive up to $1 billion a day for its oil exports.

In case European leaders decide to cut their demand for Russian oil, investment bank JPMorgan Chase estimates that the price of a barrel of crude oil could jump to $185. This jump in the price of a barrel of oil would inevitably affect the cost of living around the world.

The United States is currently grappling with the highest inflation in 40 years, while European prices are already rising at over 7.5% per year. In Europe, energy costs have risen by as much as 44% in less than a year, so a total shutdown of the Russian oil tap would inevitably lead to even higher energy prices.

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