Russia’s Oil Dilemmas

Russias Oil Dilemmas

The war between Ukraine and Russia has been going on for many years, beginning in February 2014. With the war raging on in Ukraine, neither side is giving up. Russia is a powerhouse with its large military, and they are strong. Ukraine has a lot of support backing them up from all over the world. Even though Ukraine is not part of the North Atlantic Treaty Organization (NATO), it has been getting a lot of funding from those who are a part of it, with the biggest supplier being the US. 

Russia was severely weakened when the G-7, the EU, and Australia capped the price of Russian Oil at just $60 a barrel in December. And, starting in February, “High-value Russian exports such as diesel and gasoline…capped at $100 while lower-value products such as fuel oil…capped at $45″ according to the lower prices, funding and supplying fuel to machinery is getting harder for Putin and his army.

With the caps now in play, let’s look in more detail.

The war has only gotten real attention in the last year as Russia made its move and invaded Ukraine. With the help of NATO and its other allies, Ukraine has been holding on as the two nations battle. With the threat of nuclear war looming, the importance of ending the war is paramount. The main goal of these oil caps is to lessen the funding Russia gets, in the end slowing down their military.

In response to the caps, the Kremlin has been working on other alternatives to make money such as heavily discounting its oil to make it more captivating for buyers. Russia has also said that it would not sell its crude to any country that follows the cap. After an oil markdown, China has been supporting its communist ally by buying tons of discounted oil from Russia. Though the profit is very little, this still helps some funding for Russia. Ukraine has also got involved in this oil extravaganza by sending drone strikes on oil deposits in the Kursk region of Russia. 

Even with the cap, Russia is still a huge oil-producing and exporting country. The huge stretches of land mass between Europe and Asia allows Russia to produce around 10.9 million barrels daily. Russia’s longevity in this war is up for debate as these oil caps continues.