The crisis worsens due to the military invasion of Ukraine. The US government will stop importing oil from Russia. Putin has responded with a ban on exporting raw materials. The EU seeks to reduce its dependency as much as it can.
March 8 has left us several historic headlines in international relations. In retaliation for the attack on ukrainethe West’s war against Russia at the moment does not involve troops – and it had better be – but in economics there is already attack and defense.
Punishing the economy of the Russian Federation is the main measure of pressure against Vladimir Putin to stop the illegal invasion of Ukraine. The sanctions have gone from being cosmetic to very important, which will do a lot of damage to the Russian economy, but let’s not kid ourselves, also to those of the United States, Europe and those who join the boycott.
According to Auto Forecast Solutions, 50,000 to 100,000 units of vehicles produced in Europe will be lost in the short term
The consequences are already being felt in the form of supply interruptions, cutting back and forth trade relations with the Russian market, damage to truckers who used Russian credit cards in Europe, factories that temporarily close and a general increase in the prices of practically everything that is transported, in addition to the Petroleum and the gas.
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The President of the European Commission, Ursula von der Leyen, announced the diversification of energy imports, accelerating the deployment of renewable energies, improving energy efficiency and replacing gas for heating and power production. She planned to reduce dependence on Russia by 66% over the year.
We can’t quickly unhook from Russia’s oil and gas without prices skyrocketing, even if the wild card of Iran and Venezuela is used and they begin to export to the maximum of their capacity. You have to be aware that the situation is only going to get worse with historically high prices for fuel, gas, etc.
The movements of the United States and Russia bring us closer to a scenario of economic cold war with two well-differentiated blocs, those that are disconnected from Russia, and those connected to Russia. The power that can do more now to tip the balance is Chinawhich continues to use very diplomatic language without getting wet in this crisis.
Hold on, dangerous curves are coming.
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The United States will stop importing oil and gas from Russia
President Joe Biden announced it a few hours ago, “We are going to ban all imports of Russian oil and gas”. This will affect the main artery of the Russian economy, the US president added. Russia is the world’s second largest exporter, although the United States’ exposure is relatively low.
The other day we explained to you that the increase in fuel prices in the United States will accelerate the changes, as happened in the previous oil crises, and they are on their way to an all-time high in prices. Considering inflation, the worst time was in 2008, but it won’t be long to beat even that.
In exchange, gasoline and diesel are cheaper in the United States – a producing country with reserves – than in Europe, and its consumers notice it more when using vehicles with higher average consumption than ours. Around 3% of US crude oil imports come from Russia, slightly more if we consider other oil derivatives.
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Russia will announce to whom it will stop exporting products or raw materials
This other news is not better than the previous one. In 48 hours we will know a black list of countries with which Russia will cease to have commercial relations in a multitude of raw materials and manufactured products. As a guide, we can take the list of countries that have been “hostile” with Russia in the last days.
In this list are the countries of the European Union, the United States, the United Kingdom, Japan, Australia and New Zealand, Canada and South Korea. Obviously Spain is on the list. The export ban will last all year. The European Union may have to reduce its energy dependence at a forced pace if that includes gas and oil at once.
Vital raw materials such as aluminium, nickel (its price was suspended today in London for reaching an all-time high), palladium, other metals, etc. must also be added to the list. Until these products can be obtained from another place, we face an economic crisis that can be as brutal as that of 2008. Without firing a single bullet, the consequences will be catastrophic.