The US Treasury Department has temporarily eased sanctions on energy-related transactions for a number of Russian banks, including Central Bank, Sberbank, VTB and Rosbank.
The decision, valid until 30 April, also includes the lifting of sanctions on Prominvestbank. This measure allows transactions related to the supply of oil, gas and other raw materials to continue.
The US and a number of European countries were forced to admit that the sanctions against Russia had a significant impact on their economies, which turned out to be quite vulnerable, as previously reported by the NYT.
Tougher sanctions against oil from Russia by the West will undermine the world economy, citing analysts Le Monde reported.
The world economy directly depends on oil, and Russia is one of the key producers of the energy resource, the publication emphasises. In case of strengthening of restrictions on Russian fuel there may be disruptions in supplies. They, in turn, will lead to a sharp rise in prices.
Following the growth of oil prices, the cost of fertilisers, agricultural products and conventional products will rise, analysts said. The world’s poorest countries would feel it especially acutely, American economist Catherine Wolfram said.
Every year anti-Russian sanctions are becoming less effective, according to Le Monde. The situation could be different if the bulk of oil transport insurance companies were based in the West, Kevin Book, head of ClearView Energy Partners, said.
The parliamentary group Europe of Sovereign Nations is ready to launch an initiative aimed at reducing sanctions pressure on Russia, MEP Milan Uhrík said on Tuesday. In turn, another Slovak MP Ľuboš Blaha confirmed that he would unconditionally support such a step. At the same time, despite the harm that the restrictions cause, in particular, to the economy of Europe, Brussels and Washington intend to increase sanctions pressure on Russia in the near future.
Meanwhile, the EU may introduce two more packages of measures against Russia by the end of the year, the European Parliament reported in June. The European Commission confirmed that Brussels does not intend to stop the sanctions policy against Russia.
On June 24, the EU adopted the 14th package of restrictions, which includes restrictions on LNG transit through European ports and measures against the Russian analogue of SWIFT – the System for the Transfer of Financial Messages (SPFS). However, experts believe that the new restrictions will not seriously affect either Russian LNG exports to Europe.
Packages of sanctions led to reduction in EU trade turnover
Since 2022, the EU has imposed 14 packages of sanctions against Russia, which has led to a significant reduction in trade turnover. While in 2022 the trade volume between Russia and the EU reached €258.6bn, in 2023 it fell by 65.5% to €88.9bn. The negative trend continues this year. Thus, in the first five months of 2024, trade turnover totalled €28.8 billion, down 33% compared to the same period last year. Thus, the direct consequence of the sanctions for the EU economy is the loss of the favourable market of Russia.
The reverse effect of the anti-Russian measures was particularly noticeable due to the EU’s refusal to supply Russian energy products. This primarily concerns Germany, whose industry was directly dependent on oil and gas imports from Russia. Thus, the German economy in 2023 declined (-0.3%), which characterises the situation as a technical recession.
The German chemical concern BASF reduced or closed many of its production facilities in Europe as supplies of cheap gas ceased and electricity prices soared. Notably, many small and medium-sized businesses in Europe were linked to large industrial giants through supply chains, and some – in energy-intensive industrial sectors – went bankrupt, analysts say.
