Oil prices are expected to rise as the European Union’s (EU) embargo on Russian oil draws near.
The EU sanctions coordinated with the G7 (Group of Seven) Coalition would take effect on December 5 for crude oil and February 5, 2023, for refined petroleum products.
Three million barrels per day of Russian crude oil and products must be diverted to markets outside Europe and other advanced economies when the EU’s sanctions take effect, according to Reuters.
“This package introduces new EU import bans worth €7 billion to curb Russia’s revenues, as well as export restrictions, which will further deprive the Kremlin’s military and industrial complex of key components and technologies and Russia’s economy of European services and expertise,” said EU officials in a press release on October 6.
EU officials also claimed that this round of sanctions would deprive the Russian military of specific assets and equipment needed to continue to wage war and lays the basis to impose an oil price cap devised by the G7 Coalition.
“The price cap is specifically designed to reduce Russian revenues and Russia’s ability to fund its war of aggression,” G7 officials suggested.
They claimed it would also limit “the impact of Russia’s war on global energy prices, particularly for low and middle-income countries, by only permitting service providers to continue to do business related to Russian seaborne oil and petroleum products sold at or below the price cap.”
The European Union imports around 400,000 barrels of Russian diesel daily, according to The Wall Street Journal, and 1.7 million barrels of diesel from other fossil fuel providers.
The reduction of oil importation has significantly affected the cost of energy in Europe, leading them to increase logging activity in ancient forests to provide heat for citizens during the winter, as reported by The Dallas Express. Furthermore, industry leaders such as Elon Musk have called for a return to drilling and an increase in nuclear energy production to offset the effects of the sanctions.