International Cooperation with Russia Makes EU’s New Sanctions Strictly Suicidal
June 5, 2022 (EIRNS)—Several analyses published the first week of June by the Wall Street Journal and OilPrice.com, among other media, have made clear that the European Union’s announced embargo of Russian oil, part of its sixth and “most rigorous” sanctions package, is exclusively hitting European users of energy.
These sanctions do, according to OilPrice.com, require more organized planning by India, China, other Asian importers and the so-called OPEC+ (which includes Russia among others), in order to compensate for the inability now to insure Russian oil cargoes. But this cooperation is, in fact, taking place; and even though the full EU embargo is supposed to be executed only by December 2022, even larger sales of Russian oil to Asian buyers, on top of India’s and China’s large April-May increases, are being arranged. As the Journal headlined its June 1 article, “Russian Oil Producers Stay One Step Ahead of Sanctions.”
Meanwhile, the price of oil has leaped again, to approximately $120/barrel for both West Texas Intermediate and Brent Crude oil, providing Russian producers with higher revenues despite their deep discounts. The reason is that the combination of producers known as OPEC+ has kept Russia’s production in the overall OPEC+ quota, despite rumors spread from London and Wall Street that they would exclude it in order to pump more oil themselves. After the meeting between Russian Foreign Minister Sergey Lavrov and Saudi Foreign Minister Prince Faisal bin Farhan Al Saud, OilPrice.com reported June 1. Their statement said, “They noted the stabilizing effect that the tight cooperation between Russia and Saudi Arabia has on world markets for hydrocarbons in this strategically important sector.”
In fact, the OPEC producers lack much capacity to raise their production, due to nearly a decade of systematic “Green New Deal” disinvestment in fossil fuel industries.