Is the “Russian Crude Oil Exclusion” in Western Countries Effective?
(Kazuhiko Fuji: Consulting Fellow, Research Institute of Economy, Trade and Industry)
US WTI crude oil futures prices have been in the $ 100 range per barrel since May.
The composition is such that the upward pressure on prices due to concerns about the supply of Russian crude oil and the downward pressure on prices due to concerns over the decline in demand for crude oil in China are tug-of-war.
EU embargo on Russian crude oil
First, let’s look at the movement on the supply side.
On May 4, the European Union (EU) announced additional sanctions, including suspending crude oil imports from Russia, which continues to invade Ukraine, within six months. Hungary and Slovakia, which depend on Russian crude oil, have been given grace until the end of next year (2023), as the invocation requires the agreement of all member states.
The United States and the United Kingdom have already decided to embargo, but the EU, which accounts for 40% of Russian crude oil, has had difficulty adjusting its member countries.