Artyom Deyev, head of analytics at AMarkets, believes the EU’s ban on Russian oil imports will hurt the EU’s own oil market more than Russia’s.
Russia will continue uninterrupted supplies to the domestic market, which means local refineries will be producing enough fuels and other petroleum products. On the other hand, European refineries strongly depend on Russian crude supplies, and products made from Russian oil account for over 50% of the total. For Europe, the latest sanctions will mean growing shortages of fuel, car tires, consumer goods, etc. Oil is an extremely widespread commodity, used for the production of everything from gasoline and diesel fuel to most kinds of plastics, rubbers, chemicals and even cosmetics, the expert emphasizes.
The shortage of these goods will drive inflation in Europe even higher, and it has already hit its 50-year high. Some countries, such as Germany and the UK, have seen record inflation since World War II. The shortage of fuel means accelerating prices and production costs, fraught with the risk of corporate bankruptcies in Europe.
“Sanctions and restrictions on Russian energy imports are becoming a factor in global inflation and aggravating crisis trends in the global economy, which is gradually plunging into a large-scale recession,” Artyom Deyev sums up.