HomeMediaLatest News “We will lose income, they will lose heat”: what will happen if the EU introduces an energy embargo

“We will lose income, they will lose heat”: what will happen if the EU introduces an energy embargo

17 March 2022

Salikhov Marcel R. President, Principal Director on Economic Studies, Head of the Economic Department

Marcel Salikhov, President of the Institute for Energy and Finance, gave a comment to Gazeta.ru about restrictions on the supply of oil and gas.

Marcel Salikhov believes that it will be difficult for the European Union to abandon Russian oil and gas.

“It is almost impossible to do this, since the European Union accounts for 40% of gas consumption and 31% of oil products supplied from Russia. Most of the infrastructure is geared towards Russian oil. I do not think that we are really talking about an embargo. The maximum is restrictive measures,” Salikhov explained to Gazeta.Ru.

“The UK and the US have already given up buying Russian oil, but this is not a critical issue for them. They themselves extract oil. In addition, they have the opportunity to replace. Russian oil accounted for only 5 to 10% of their total imports,” he added.

“If we look at what has been happening on the oil market in recent days, we will see that oil has become cheaper. Yes, at the very beginning there was a jump to $130, but then the price went down. This means that the probability of interruptions in supplies from Russia is considered by investors as low. Interruptions are possible only in case of refusals of Europeans from further deliveries. And yet, the price drop to the level of the end of February says that the market is calm,” Salikhov explained.

“Naturally, anything can happen, including the introduction of an energy embargo. If this happens, then there will be a sharp jump in oil prices and the subsequent subsidence of the ruble. It is alarming that export earnings are now the main factor supporting the ruble exchange rate,” the expert summed up.

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