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Russia expects to earn additional oil and gas revenues of the equivalent of $9.6 billion (798.4 billion Russian rubles) this month, its finance ministry said on Tuesday.
Despite the self-sanctioning of many European buyers of Russian oil, Moscow continues to export its oil, and Europe continues to pay for and import Russian natural gas. While the U.S. banned imports of all Russian energy exports, including oil, liquefied natural gas (LNG), and coal, the European Union hasn’t had the luxury to do so, because it depends on Russian oil for around one-fourth of its supply and on Russian gas for some one-third of its gas consumption.
Even at record discounts of $30 a barrel, Russia is probably selling its flagship Urals grade to willing customers unfazed by the sanctions at around $70 per barrel, considering that oil prices have more or less stayed above $100 a barrel since Putin invaded Ukraine at the end of February.
The European Union condemned on Monday the killing of unarmed civilians by Russian forces while retreating from Ukrainian towns and vowed a new wave of severe sanctions would follow against Russia in a matter of days, including potential sanctions against Russia’s oil, gas, or coal exports.
Europe has refrained from directly targeting Russian energy exports fearing that sanctions or an embargo could lead to a deep recession in the major European economies, including the biggest one, Germany.
Germany has so far been one of the staunchest opponents to an energy embargo on Russia, but after photos of Russian atrocities in Bucha and other Ukrainian towns emerged, the mood appears to be shifting even in Berlin.
The EU plans to propose a ban on imports of Russian coal after footage continues to emerge of alleged war crimes committed by Russian troops withdrawing from Ukrainian towns, Bloomberg News reported on Tuesday, citing sources with knowledge of the discussions.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com