As the new wave of sanctions on Russian energy comes into the light, the darkness has surrounded the Russian economy. Europe is set to see record diesel imports amid the new phasing out of long-term Russian energy contracts on the continent. The geopolitical situation has been palpable and has far-reaching effects on Russia’s ability to fund its “special military operation” in Ukraine. To add fuel to the fire, quite literally, Ukraine has been targeting Russian refineries with a strategic drone strike campaign, leading to added pressure on the Russian economy as a whole.
According to industry analysts, Europe has increased diesel imports from non-Russian suppliers
In response to Vladdy’s continued aggression towards the West, and the Ukraine war showing no signs of ending soon, the EU has increased imports of diesel from non-Russian suppliers, closing a loophole that allowed nations to circumvent the new sanctions by processing Russian crude to make their petroleum products.
During October, European ports welcomed with open arms cargoes carrying roughly 1.9 million barrels of diesel and jet fuel from India, Saudi Arabia, and the United States, among others. India, in particular, has relied on a loophole that enables it to use Russian crude to produce petroleum products, which now will be coming to an end thanks to the new wave of sanctions by the EU and the United States.
The 18th round of EU sanctions on Russia outlines a potential ban on all energy products
The 18th round of sanctions on Russia has resulted in a significant squeeze on Russia’s economy. Couple that with the new sanctions on Lukoil by the United States, and Russia’s self-funding war will be facing a troubling time in the near future.
“The EU is introducing an import ban on refined petroleum products made from Russian crude oil and coming from any third country – with the exception of Canada, Norway, Switzerland, the United Kingdom and the United States – thereby preventing Russia’s crude oil from reaching the EU market through the back door.” – statement by the EU in its 18th sanctions package on Russia
October saw the latest round of sanctions by the EU on Russian LNG
In October, the EU imposed its 19th round of sanctions on Russian LNG; this new measure aims at phasing out the gas sector’s former reliance on Russian imports by the end of 2027 for long-term contracts.
The new sanctions target key sectors of Russia’s economy, like energy, finance, and crypto providers, which would inevitably negatively affect Russia’s economy and ability to fund its war in Ukraine.
Ukraine’s targeted drone strikes on Russia’s oil refineries have further compounded the nation’s problems
Ukrainian President Volodymyr Zelenskyy has stated that as of October, Ukraine’s targeted drone strikes have negatively impacted the Russian energy sector and economy as a whole. The geopolitical tensions in the region are spilling over into other markets as diesel and jet fuel supplies from Russia are set to substantially decrease.
Ukraine’s drone strike campaign peaked in August with 14 strikes on key Russian energy infrastructure, followed by another eight in September. The new sanctions by the US on Lukoil have strangled Serbia’s oil supply, leading to market instability.
The death of the EU’s reliance on Russian energy imports is a lot closer than you might think
The targeted end of the EU’s reliance on Russian energy imports is set to be accelerated by the recent news that the EU’s energy ministers have approved a plan to end Russian gas and LNG imports by 2028. The world has fostered a new future where the Russian economy is placed in a chokehold thanks to the litany of sanctions on its energy sector. The end of Russian imports of LNG, oil, and other resources is a lot closer than Putin might be hoping for. He surely is aware of the impact sanctions have on his nation; regardless, the EU is moving to diversify its energy supply.
