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United States Bans Russian Oil and Gas Imports: What Will Be Consequences?

U.S. President Joe Biden has announced an embargo on energy supplies from Russia. The United States is giving up Russian oil and gas in order not to finance Putin’s “war machine.” Biden acknowledged that the decision would hit the U.S. economy but called it a “forced move.” Europe has been unable to join the embargo due to its heavy dependence on Russian energy resources.

“In fact, the U.S. embargo has little to do with Ukraine. Although we are a key player in this geopolitical game. Russia’s war against Ukraine has become a catalyst for the global redistribution of the energy market around the world. The United States will try to limit Russia’s role in the world’s gas and oil balance over the next few years (oil is a key driver of the Russian economy),” said Vadym Denysenko, Executive Director of the Ukrainian Institute for the Future.

He noted that Russia can (should) be replaced with Iran, Venezuela, the Gulf countries and, above all, Saudi Arabia. Now, the United States is working in all three directions.

In addition, the expert said that the Americans, de facto, promised Venezuela to lift sanctions in exchange for moving away from Russia.

“For the first time since the journalist’s assassination, the U.S. president will visit Saudi Arabia to agree on a new oil redistribution of the world. The game of ousting Russia has begun, although at first glance, now the extremely high price for oil and gas in the coming months will play in favour of Russia,” Denysenko says.

Conclusions:

  1. Extreme oil prices are hitting the world economy globally, especially the EU and China. The most important thing for them is to stop the galloping price.
  2. The EU (Germany) will try to hold on to Russia for some time (Europe objectively cannot do without Russian energy for the next two to three years). But it is important for them to end the war in Ukraine as soon as possible.
  3. China did not expect Russia to get stuck in Ukraine. And the current situation around oil is forcing China to join the negotiations on Ukraine. And here it is possible that China will start negotiations with the United States to resolve the oil issue.
  4. We have become too important for the world. The whole world is now forced to play the game “how to reduce the price of gas,” and one of the most important elements in reducing the price is to resolve the Ukrainian issue.
  5. Russia cannot help but understand how far Putin has gone with his adventure. And they need at least some kind of victory before they are forced to negotiate effectively (the main blow is Mariupol and an attempt to do something in Kyiv).

“Therefore, our task is to survive the next 7-10 days. Then, in all likelihood, Putin will be made to sit down at the negotiating table. And whatever the results of these talks, Russia will start to be thrown out of the global oil and gas market,” Denysenko concluded.

Natalia Tolub

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