Gil Befman Chief Economist of Bank Leumi (Photo by Oren Dai, Flash 90, Magma Images)
The US and Germany, along with the rest of the G7, are discussing further tightening of sanctions on Russia which will include a restriction on the price allowed to be paid to Russia for the oil purchased from it, but the way in which the sanction will be implemented has not yet been proposed.
“Note that in the past week, Europe imported about 1.84 million barrels of oil a day from Russia, which is about half of Russia’s total oil exports, while the other half of Russian oil exports are to Asian countries,” said Gil Lefman, chief economist at Bank Leumi.
More in-
“So far, it is not clear whether they will be able to implement this sanction and at the same time continue to supply oil from Russia to Europe. “Exacerbate the energy crisis in Europe and support rising oil prices and distillates,” he said.
Befman further estimates that by the end of the year Europe plans to reduce its dependence on Russian oil so that in the medium term it will be more convenient for European countries to impose such a sanction after it finds alternative sources of energy supply in the winter season.
“The only way such a sanction could be effective is if Western countries succeed in getting India and China to cooperate, but for now it seems that both countries prefer to buy energy at a relatively cheap price from Russia over cooperation with the West. “This situation, while enjoying a large refining margin on distillates, which place in Russian oil, which will be exported to other countries, even those seeking to comply with the sanctions” he concludes.
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