March 21, 2022
A European ban would be a blow for the beleaguered Russian economy, already suffering from Western sanctions. The energy sector contributes as much as one-fifth of Russia’s gross domestic product and makes up around 40% of its budget revenue. In 2021, crude oil and petroleum product exports made up 37% of Russian export revenue, according to the Brussels-based think tank Bruegel.
Around half of Russia’s crude oil exports go to Europe. The EU and U.K. paid around 88 billion euros, equivalent to $97 billion, to Russia for oil exports last year, including crude oil and products, Bruegel said.
An EU ban would constrain European supplies—and global markets. Russia represents around 28% of the bloc’s overall crude oil imports. While oil can flow more easily around the world than gas, a ban of Russian oil to the EU would likely send a supply jolt across global markets.
A ban could, at least temporarily, take out around 3 million barrels a day from a global market of around 100 million barrels a day—a significant chunk in an already tight market, analysts say. Oil prices have soared amid the Ukraine crisis over worry about Russian supply.
The EU also imports from Russia some 15% of its oil products, such as diesel, naphtha and fuel oil, Bruegel said.