Opinion: Russian oil embargoes: What Europe doesn’t take, others will

India has emerged as Russian President Vladimir Putin’s best economic friend. For the West, it wasn’t supposed to work that way.

That’s the thing about oil. About two-thirds of the oil and refined products consumed around the world are delivered by ships. Ships can go anywhere at any time; pipelines cannot be moved. Capital Economics last month forecast that Russian oil exports would fall about 20 per cent this year, even factoring in rising exports to India and elsewhere, but that high prices will keep its export revenues largely intact.

But Hungary, which is heavily reliant on Russian pipeline oil, won an open-ended exemption from the embargo. Slovakia and the Czech Republic are also expected to win exemptions. The insurance ban is a potentially far more powerful punishment tool than the oil embargoes. But the EU has proposed a half-year phase-in, giving creative Russian shipping minds time to explore other insurance routes.

Banning natural gas exports to Europe might do the trick for the simple reason that pipeline gas cannot be diverted easily to other markets, as oil can. The EU imports 40 per cent of its gas from Russia. If Russia were to lose that market, it could not turn around and sell that gas to China. The pipelines in western Russia that deliver the fuel to Europe are not connected to the eastern pipelines.

I’ll take “Duh” for 1000 Alex.

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