Shrinking Russian oil restrictions threatens international economy
Date
11/6/2024 7:26:28 AM
(MENAFN) Efforts by Western nations to impose stricter sanctions on Russian oil could have detrimental effects on the global economy, according to a report in *Le Monde*. The French newspaper warned that further tightening of sanctions on one of the world's major oil producers could lead to soaring fertilizer prices, which would, in turn, increase global food costs.
US economist Catherine Wolfram cautioned that rising oil prices would hit the poorest countries hardest, potentially driving them into a humanitarian crisis. She added that such a scenario could tarnish the West's reputation in the eyes of the Global South, pushing these nations to forge stronger economic ties with Russia.
Kevin Book, CEO of ClearView Energy Partners, noted that while sanctions on Russian oil might have had more impact when Western companies dominated the oil insurance sector, the situation has changed. Today, much of the oil transportation and insurance industry is based outside of the West, making sanctions less effective.
Western governments have implemented several rounds of sanctions on Russia in response to the ongoing Ukraine conflict, including a price cap and a ban on Russian seaborne oil to weaken Russia’s economy. However, Moscow has largely managed to sidestep these measures by rerouting its oil exports to Asia, particularly to China and India.
Le Monde also highlighted that while some Western restrictions, like the ban on spare parts for military equipment, have long-term effects, the oil sanctions have had limited success. The price of Russia’s flagship Urals crude has largely remained above the Western-imposed price cap.
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