Russian president, Vladimir Putin has warned that if Europe would be committing “economic suicide” if it goes ahead with the threat to ban crude oil and natural gas from Russia.
Putin who spoke yesterday also stated that any attempt to reduce energy supplies from Russia would ultimately hurt Europe, and not Russia.
According to him, gas supply ban by the EU would raise inflation level and send high energy prices even higher.
Not only would such a move hurt Europe and not hurt Russia, but it would also actually add to Russia’s bottom line by increasing the price of crude oil that it exports, Putin argued yesterday (Tuesday).
Since the invasion of Ukraine by Russia, the European Union has been piling up sanction against Russia, with the aim of weakening the resolve of Putin’s country in the war.
So far, Europe has yet to agree on any collective crude-oil-related sanctions, which would eat into Russia’s bottom line.
Germany, however, has said it would halt all Russian oil imports by the end of this year. Europe has so far agreed to exempt Hungary and Slovakia from any Russian oil embargo until 2024, but Hungary has so far refused to agree to an oil embargo.
The International Energy Agency (IEA) estimates that a Russian oil embargo could push Russia’s crude oil production down to 9.6 million barrels per day.
The IEA is a Paris-based autonomous intergovernmental organisation established in the framework of the Organisation for Economic Co-operation and Development.
Observers say, as the days of negotiating wear on, it is looking less and less likely that an embargo of Russian gas will pass in the EU.
Reports say the US is instead proposing a less painful solution to those countries wanting to disentangle itself from Russia. The U.S. has proposed a tariff on Russian oil instead of an embargo and will be formally suggested at the G7 finance summit later this week, a source said.
The measure would in theory insulate Europe from any supply shocks, while restricting Russia’s oil revenues.
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