From today the European embargo on Russian oil is triggered: imports of crude oil by sea are forbidden (not those through pipelines) and according to calculations by the EU Commission this should block 94% of Moscow’s crude destined for Western Europe. In addition, today a move agreed by the G7 (plus Australia) to impose a $60 a barrel price cap on Russian oil, a “price cap” that Moscow has already announced it will not accept, goes into effect. However, the European measure is more drastic, it is a total blockade.
What actually changes for Italians and other Europeans? The timing and methods of the embargo have been calculated to minimize and perhaps eliminate the impact. Our dependence on Russian oil has never been as strong as that on gas; the flows were minor and easily replaceable, and the embargo was deferred for a long time, during the months of the war in Ukraine, and came into force only after all the necessary adjustments had been made by the European side. As proof, the price of the barrel in these hours is not undergoing significant fluctuations.
However, assessments should not be made only on the basis of today, because the energy market is a long-term market.
OPEC, the association of oil exporting countries, has announced that it will not increase production to make up for the lack of Russian crude. After all, OPEC has been coordinating production policy with Russia for some time, within the informal association defined as OPEC+, in order to keep the price per barrel high; the current level of 80 dollars is considered appropriate and sustainable, while in recent years it had fallen below 20, and in a single day the quotation had even dropped to zero. In the medium term, analysts forecast a global shortage of crude oil, because although the green transition is reducing the share of hydrocarbons in the global energy mix, oil consumption is increasing in absolute numbers, now steadily exceeding 100 million barrels per day, and current production facilities have been suffering from a lack of investment for some time.
Returning to current events and to Russia, it seems that Moscow is already trying to organize itself to circumvent the European embargo, through sales to other countries which would then resell the crude oil in Western Europe.