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Western allies have imposed harsh sanctions on individuals and parts of the Russian economy following the Kremlin’s unprovoked aggression against Ukraine. But a large part of the Russian economy is doing well. Despite sanctions hitting much of the Russian economy, the country is securing large sums of money through the wealthy energy sector. This is because oil exports have been affected very little.
VOA spoke with Ben Cahill, an energy and climate analyst at the Center for Strategic and International Studies.
“Many analysts as well as the International Energy Agency expected Russia to have a loss of 2-3 million barrels per day of oil production capacity, but that did not happen. The loss is likely to be 1 million barrels per day. We are at the point where European officials raise the question of what needs to be done next. How can we increase economic pressure on Russia? “Because things are not working.”
Western sanctions have prompted Moscow to retaliate, prompting calls in Europe for alternative energy sources. In France, farmers are producing fuel from the fermentation of crop residues and other agricultural products to power several hundred or thousands of homes. In Portugal, a grid of solar panels the size of four football fields is the latest attempt to give up fuels.
Germany’s deputy chancellor recently accused Russia of using oil as a tool of war. However, prices continue to rise. Which means that even though it is selling less oil, Russia is making more money.
“It’s paradoxical. The more efforts are made to block oil from the market, the greater the impact of the oil price on countries that import Russian energy. And this is an economic pain that European policymakers may be willing to tolerate. But you can not try to remove the largest oil exporter in the world from the market without economic impact. “And it’s a global impact.” says VOA analyst Ben Cahill with the Center for Strategic and International Studies.
This has further strained global supply chains. The cost of oil is severely hurting truck drivers who transport almost everything bought on the market. Analyst Ben Cahill says some sanctions proposed by the EU could seriously hurt Russia.
“If you cut off transport insurance, it means that no carrier of Russian goods can be insured. “This poses a great risk in the event of tanker accidents as they do not have insurance to protect themselves.”
As Europe faces energy problems, the analyst says Russia has been somewhat lucky, selling oil to India and China, but often at low prices, around $ 30 a barrel below market value.
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