Here is an update on the most important resource that is exported from Russia: oil. Russia has been involved in an un-instigated conflict with Ukraine for nearly three months. It has caused great distaste in many leading countries around the world for the Russian government. Thus, many countries have enacted sanctions or penalties against Russian goods and assets. 

What oil and gas sanctions are in place?

The European Union’s president, Ursula von der Leyen has recently announced all countries in the EU will be banned from buying Russian oil after the end of 2022. (Excludes Hungary and Slovakia who will be able to keep buying Russian oil until 2024) In March, the EU committed to reducing Russian gas imports by two-thirds. The US has declared a complete ban on Russian oil, gas, and coal imports and the UK is working on the same. Russia claims that banning its oil would cause “catastrophic consequences for the global market”. 

Russian Oil

So how much oil does Russia really export? Russia is the third greatest producer of oil, behind the US and Saudi Arabia. In 2020, the Netherlands and Germany bought the most Russian oil per day. Slovakia and Hungary are excluded from the EU oil ban for an extra year as they use Russian oil as 96% and 58% of their stores, respectively. Russia only accounted for 8% of UK oil imports and 3% of US imports last year. 

Russian Gas

Russia supplied Europe with 41% of its natural gas imports. The UK receives little and the US receives no gas from Russia. What are alternatives to Russian gas? Europe could turn to other gas exporters like Qatar, Algeria, and Nigeria but there are clear obstacles to doing this quickly to minimize economic damages. The US has agreed to ship 15 billion cubic meters of natural gas to Europe by the end of this year. Lastly, Europe could obviously switch to other energy sources such as wind and solar but this process is not inexpensive, quick, or simple. 

What can be done?

Around the world there has been 120 million barrels of oil released from countries’ stockpiles- the largest release of all time. Joe Biden has released many barrels from America’s reserve in the hopes to bring down gas prices. The US is also asking Saudi Arabia to increase its oil production to help the pains caused by bans on Russian oil. Additionally, the US government is thinking about relaxing sanctions on Venezuelan oil, which was penalized for their government’s human rights violations. 

Why Should We Care?

First of all, there are hundreds of millions of people being affected by this growing problem in Europe. For starters, consumers will face rising energy and fuel bills. Average energy bills in the UK rose from $730 to $2100 and are expected to rise again to over $3200 when the energy price cap is raised this fall. Besides if this negatively impacts your friends or family overseas, if the prices of UK and other European energy increases, so will just about everything in those countries, which will be in turn much more for Americans. Additionally, Russian makes up 14% of the world’s total oil supply, so every country’s oil prices will be affected to some extent by this.

The Bigger Picture
Although we may all be affected negatively by the increase in energy prices around the world, it is important to remember why these bans were put into place. Russia has chosen to invade a country without instigation. They have killed thousands of civilians and soldiers and have shown no mercy towards humans to any extent. This war has caused 6 million people to flee their homes in Ukraine. Families have been separated and destroyed, and physical and psychological tolls are irreversible on these people. European countries were not always completely adamant about banning all Russian oil, but when the Russian army raped and pillaged the communities around Kyiv, demolitions cities like Mariupol, bombed theaters killing more than 600 including children, shelled hospitals and railway stations, and tortured civilians all that changed. These atrocities were the cause of these bans and they are well deserved by Russia. These bans will work and greatly harm the economy of Russia. Russia claims it will destroy the whole world’s economy, and the truth is it might hurt other countries but it will be a complete catastrophe for the Russian economy as oil represents 74% of Russia’s export revenues. Without this revenue from oil exports, the war atrocities in Ukraine might finish relatively quickly. Of course EU countries and others around the world will have to find ways to replenish their oil supplies, but this is the right thing to do. The ban of Russian oil is one of the most effective ways to stop the war.