US President Joe Biden announced on Tuesday that he will ban the import of Russian oil, gas and other energy sources into the United States. Also on Tuesday, the UK government announced a ban on Russian oil at the end of 2022, and The European Commission has presented a plan to quickly become independent from the European Union from Russian gas supplies. It assumes a two-thirds reduction in the EU’s dependence on Russian gas in 2022.
PIE analysts emphasized that these are the first measures on this scale targeting the sensitive sector in Russia. “Another step with much greater impact should be a ban on oil imports from Russia into the European Union, which is being pursued, among other things, by Polish diplomacy. This measure will reduce the budget of the Russian Federation by about 51 billion dollars. Piotr Arak, Director of the Polish Economic Institute, noted that these funds, both now and in recent years, have constituted one of the main sources of financing for the military expansion of this country.
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According to the analysis of PIE experts, through skillful diversification of oil supply sources, the European Union will be able to completely exclude oil supplies from Russia.
PIE analysis shows that Russian oil accounts for only 9 percent. It was imported by Great Britain and is a tiny part of the British energy mix. PIE experts estimate that the British ban on the purchase of raw materials from Russia will deprive Moscow of about 1.4 billion US dollars in revenue per year.
As noted, the United States, unlike the European Union, no longer imports Russian gas, and coal is imported in very small quantities. The value of Russian oil exports to the United States in 2021 amounted to 3.7 billion dollars.
“The impact of the US embargo on Russia’s revenues will be about 14 times less than in the case of a possible European embargo on oil alone. Despite the relatively small impact on the US and Russian economies, we expect that The ban announced by President Biden will increase the prices of raw materials in global markets— Maciej Miniszewski, an analyst on the PIE Climate and Energy team commented.
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With regard to the European Union’s plans to become independent of Russian gas supplies, analysts noted that the changes are distributed over time, because The EU economy is partly dependent on Russian raw materials. “Approximately 40 percent of imported gas, 25 percent of crude oil, and 45 percent of coal come from Russia. The revenue of the Russian Federation from the sale of oil and gas to the European Union constitutes nearly 20 percent of the budget, and therefore Any embargo will seriously harm the Russian economy, but this requires building alternative sources of supply of raw materials. The plan currently being presented by the European Commission could reduce the revenue of the Russian Federation by about $2.4 billion.Magdalena Mag, Head of the Climate and Energy Team at the Polish Economic Institute, sums it up.
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