Sanctions on Russian oil impact global economic consequences
Date
11/3/2024 3:32:38 AM
(MENAFN) Efforts to further tighten Western restrictions on Russian oil might negatively impact the global economy, according to a report from a French newspaper on Wednesday. The article showed that doing this to one of the top main oil-producing nations might lead to a spike in fertilizer prices, ultimately driving up global food costs.
“The rise in oil prices would disproportionately affect the poorest countries, potentially pushing them into a humanitarian crisis,” as per stated by Catherine Wolfram, US economist. This situation might affect the Wests reputation among countries in the Global South and push them to strengthen relations with Russia.
Additionally, Kevin Book, the CEO of US-based ClearView Energy Partners, stated that sanctions might have been effective when most oil transport insurance companies were based in the West. He pointed out that this is no longer the case.
In response to the Ukraine conflict, Western governments have imposed extensive sanctions on Russia. These include a price cap along with restrictions on Russian seaborne oil as to negatively impact the economy of the country while ensuring that Russian crude remains available in global markets to prevent price surges
These sanctions were initiated in December 2022 and followed by similar restrictions on Russian petroleum products in February 2023. They prohibit Western firms from offering insurance and other services for Russian crude shipments unless the oil is purchased at or below USD60 per barrel, which is below the current market price.
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