Three months from now, an EU-wide embargo on Russian crude oil imports will kick in, shutting off almost all shipments of the commodity from Russia to Europe. But right now, Europe is importing over 1 million barrels of Russian crude daily and has been doing so for the last month. Someone is stocking up before the taps turn dry.
While they publicly condemn Russia for its actions in Ukraine and equally publicly assure their constituents that sanctions are working, European (and other) politicians make no mention of the continuing Russian oil purchases.
Yet, Russia is exporting some 3.32 million barrels of crude daily by sea, Bloomberg calculations have shown, which means Europe is buying a third of that, while it still can. And this means that nothing has changed since June when the embargo was approved, and Europe will have to find alternative oil suppliers at a time of likely higher prices.
Right now, prices are slumping because of new lockdowns in China and expectations of rate hikes by central banks, but once the embargo door shuts, chances are that prices will rebound just when Europe finds it most painful. And that is exactly why it’s stocking up now on the oil it’s about to ban.
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