Without clear alternatives and with energy prices rising, the planned sanctions in the energy sector are likely to harm the European Union itself more than Russia. This makes this part of the European continent even weaker, poorer and more vulnerable.
An analysis by Timur Fomenko
The European Union (EU) last week announced ambitious suggestions to introduce an embargo on oil imports from Russia by the end of 2022. After tough negotiations and publicly expressed doubts about the effectiveness of such measures, which met with strong objections from several member states, including Hungary and Slovakia, EU Commission President Ursula von der Leyen stated that these measures were gradually implemented over the course of the year would.
As expected, this announcement failed to appease markets and crude oil prices immediately shot to the upside $114 a barrelwhile officials in Moscow predictedthat the EU will continue to buy Russian oil, only then through third countries and intermediaries. This is the same strategy that allegedly drove Iran, which was forced under tough US sanctions.
Although the EU Commission has complained that the planned measures are “tough” to the European public, the EU as a whole will be the biggest loser of such an effort for several reasons. The proposed embargo exposes a major strategic vulnerability in Europe’s “energy security,” the ability of a state or group of states to secure access to energy resources when it cannot produce enough of them itself. When you consider how many wars the West has fought just over access to oil reserves, including two in Iraq, that’s a big deal.
For the EU, ending oil dependency remains a difficult step that will only exacerbate the already soaring energy costs and inflation on the continent. Will the Union find new suppliers? And if so, doesn’t the renewed strong dependency on other partners also entail new dangers?
In 2020 29 percent of the crude oil imported into the EU came from Russia, 9 percent from the USA, 8 percent from Norway, 7 percent each from Saudi Arabia and Great Britain and 6 percent each from Kazakhstan and Nigeria. The exclusion of Russia as the largest supplier means that the European Union must now secure and drastically increase its imports from other suppliers. the
The closest candidates for this are the states on the Persian Gulf. This means that the EU’s strategic dependence on access to oil resources in the Middle East will also increase drastically, which of course will in turn strengthen these countries’ bargaining power and political influence.
So far, everything indicates that the OPEC countries primarily want to benefit from higher prices and refuseto meet Western demands for an increase in production (for the purpose of lowering prices). Trading is about supply and demand. If supply falls but demand remains high – assuming you can’t do without oil – then prices will rise. And why should any producer in the world lower their prices if the buyer cannot find or accept an alternative supplier for his important product? The fact that Russia itself is part of expanded OPEC+ makes things even more difficult.
As a result, the EU is making a huge mistake in its foreign policy, while at the same time having neither a contingency plan nor a strategy to address this emerging problem. Currently, the EU is determined to use Ukraine in an attempt to force military defeat on Russia.
The EU has now also proclaimed itself an “Indo-Pacific” power and has shown little initiative to avoid being drawn into Washington’s proposed confrontation with China, a relatively distant region to which the EU has no land or political ties has sea borders. This gives the EU the option of entering into a partnership with India. But even this nation of 1.3 billion people is a net energy consumer, not a supplier – which is another reason why attempts to use it to undermine ties between New Delhi and Moscow are likely to fail.
All of this leaves a gaping hole in EU foreign policy when it comes to “strategic energy security”. While officials in Brussels seek to reduce “strategic dependency” on Russia, they instead only create a patchwork of EU dependencies on other regions, thereby opening the door to new risks.
For example, how can this crisis survive the EU’s hitherto directionless policy towards Iran, which nominally opposes the US’s unilateral “maximum pressure” strategy? Can the EU avoid having to resort to Iranian oil? And regardless of that: how would the EU react if Iran – despite all US sanctions – continues to gain strength as a result of rising oil prices? And that question arises before we even consider what would happen if another major crisis or conflict in the Middle East cut off oil supplies from there. What would the EU do if Iraq slipped back into chaos of insurgency and civil war?
Russia is too big a global energy resource to ignore, so EU sanctions will not deal a deathblow to the Russian economy. If the proposed embargo is phased in, Russia will earn even more in the short term from rising prices anyway. This only goes to show that the EU is merely drastically weakening itself in order to ultimately serve the interests of the United States, whose disproportionate power overseas controls the European Union’s strategic and foreign policy. Certainly, the US benefits from EU energy sanctions against Russia – but not at the expense of Putin, but at the expense of European consumers.
The sanctions will do more damage to the EU itself than Russia and will be as painful economically as they are strategically disastrous. The EU has no concrete alternative to Russian oil and gas, but what is worse, it has hardly considered an alternative.
This will make the old continent weaker, poorer and more vulnerable, and threatens a horrible repeat of the 1970s energy crisis which, given the data on inflation, is already looming.
more on the subject – Oil embargo, but not completely and not for everyone
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Translated from the English
Timur Fomenko is a political analyst