President Vladimir Putin is struggling to sustain the war in Ukraine as the revenue generated from exporting fossil fuel collapsed in December.
As per the Ukraine officials and campaigners, targeting the Russian oil export has significantly hampered the war efforts. It expects Western policymakers to increase financial pressure on Moscow as it will help Kyiv.
As per the report from an independent Finnish think tank, the Center for Research on Energy and Clean Air, published on Wednesday, Moscow lost 160 million euros ($171.8 million) daily during the first month of European Union imposed a ban on seaborne imports on Russian crude oil and the price cap implemented by the G-7.
The sanctions imposed on Russian crude oil by the Western Unions have badly impacted the revenue generated by Moscow, falling 17% in the final months of 2022. In addition, Russia, one of the largest oil producers and exports, saw a significant profit slump as Putin initiated a full-scale invasion of Ukraine in February, per CREA’s report.
“The EU’s oil ban and the oil price cap have finally kicked in, and the impact is as significant as expected,” a lead analyst at CREA, Lauri Myllyvirta, stated in a statement.
“This shows that we have the tools to help Ukraine prevail against Russia’s aggression. It’s essential to lower the price cap to a level that denies taxable oil profits to the Kremlin and to restrict the remaining oil and gas imports from Russia,” Myllyvirta continued.
On the 5th of December, the Group of Seven, Australia, and the EU restricted Russian from selling its crude oil at more than a $60-per-barrel price cap. Simultaneously the EU and the United Kingdom imposed a ban on seaborne Russian crude oil imports.
These combined measures proved effective in restricting the Kremlin’s effort to curtail the fossil fuel exports funding the war machines against Ukraine.
Although the ban and price can on Russian oil have been placed, the effectiveness could be more skeptical since Moscow has rerouted its European seaborne shipments to countries like China, Turkey, and India.
Russia retaliated against the Western countries’ steps by banning oil exports to countries that honor the price cap.
Dmitry Peskov, Kremlin’s spokesperson, had previously stated that a Western price cap on Russian oil would hardly impact its potential for its “special military operation” in Ukraine. However, warning further on the global impact, Peskov noted that global energy markets would destabilize due to such measures taken by the Western countries, as reported in Reuters.
Russia’s Finance Minister spokesperson was unavailable to comment on these current developments as per the reports.
- Published By Team Timeswire