US imposes sanctions on Russia on oil and gas imports

The war between Ukraine and Russia has now lasted 13 days. This war’s consequences are now affecting the entire world. Even after facing numerous sanctions imposed by all countries, Russia refuses to halt its actions in Ukraine. As a result, new equations have begun to emerge on a global scale.

Many countries, including India and the United States, have found it difficult to deal with the deteriorating economy as a result of global sanctions against Russia. Despite the fact that Russian companies have offered to sell crude oil at a reduced price to a number of countries, including India. It does, however, have a lot of screws.

After extracting gas and liquid fuel from crude oil, engine/motor oil is made.

It is also feared that the United States and other Western countries will be affected. Although Russia’s oil and gas exports are not subject to sanctions, crude is at a 13-year high of $140 due to voluntary buyers refusing to buy Russian oil.

Meanwhile, the United States has imposed a ban on Russian oil imports. On Tuesday, President Joe Biden made a statement in this regard. At the same time, Britain has stated that by the end of 2022, it will be independent of Russian oil and gas imports. Prime Minister Boris Johnson announced the formation of a task force to find alternative suppliers in this matter.

Many other products, in addition to petrol and diesel, are produced from crude oil; as a result, as the price of crude rises, the price of petrol and diesel rises as well.

Not only that, but Saudi Arabia’s old foes are now looking into the possibility of oil deals with Venezuela and Iran. For this, the United States has dispatched officers to Venezuela. Relations between the United States and Venezuela have been strained thus far. Despite US sanctions, White House press secretary Jen Psaki said crude could be taken from Iran. The nuclear deal talks are also involving oil.

The Russian economy will collapse if this occurs.

Oil is one such capital that can provide a lifeline to Russia’s troubled economy. Russia produces 8 million barrels of oil per day and exports it to more than 80 countries. Europe consumes 25% of the country’s oil, while China consumes 15%. In India, Russian consumption is only 2%. The ban on Russian oil, according to Russian Deputy Prime Minister Alexander Novak, will cause a global economic crisis.

It will be impossible to replenish its supply on European markets in the near future. Russian Deputy Prime Minister Alexander Navak, on the other hand, has warned that the war could push the price of crude to $300 per barrel. Petrol prices in the United States are at their highest in 14 years, despite the fact that the country is already experiencing the highest inflation in 40 years.

Many other products, in addition to petrol and diesel, are produced from crude oil; as a result, as the price of crude rises, the price of petrol and diesel rises as well.

Why is Russia providing India with cheap oil?

Troubled Many countries, including India, are being offered crude by Russian companies at a discount of 25-27 percent. However, bringing it to India poses numerous challenges. The cost will be the same after all expenses, including logistics.

Tanker: There is talk of providing free oil on board. To put it another way, take it yourself. Tankers bring in 80 percent of India’s oil from western countries. Will these countries provide tankers to transport Russian crude?

Insurance is something that Indian businesses take care of for themselves. This is followed by foreign company support. Western companies are unwilling to provide insurance on Russian oil as a result of the sanctions.

Oil is bought and sold in dollars. The international payment system SWIFT has been blocked for Russia. Indian businesses are attempting to find a solution. First, work on business prospects in Rupees and Rubles has been completed.

How can Russian crude arrive: Russia’s oil is exported despite the war. Imports can be accomplished through bilateral agreements and spot sales on the international market. The nationality is no longer relevant once the oil spot enters the market. It resembles the fruits and vegetables that were purchased at the market. Profit and loss, as well as ease of import and payment terms, are important in this situation. Russia’s offer can be taken advantage of because it is convenient on all levels.

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