Only a complete embargo on trade with the Russian Federation, or at least on oil supplies, can stop the war in Ukraine

Even at the beginning of the full-scale invasion of Ukraine, most experts noted that only a complete embargo on trade with the Russian Federation, or at least on oil supplies, would be able to force the Russian authorities to stop the war, since the revenues from the export of oil and gas make up 34.5% of the Russian budget. Thus, $110.1 billion received from the sale of oil accounted for 22.3% of Russian export revenues.

Despite Ukraine's calls to ban the import of Russian oil, Western countries only limited the maximum price for it to $60/barrel, although today it trades at $75/barrel.

Therefore, the reduction of the export of petroleum products from the Russian Federation was taken up by the Ukrainian special services, which in the last 2 days damaged 12% of Russian processing capacities, namely:

• March 12 – a 2,000-cubic-meter gasoline tank at the Rosneft oil depot in Oryol, the Lukoil oil depot in Kstovo, and the Lukoil NORSI refinery, which processes 15.8 million tons of oil per year or 5.8% of the total oil refining volume of the Russian Federation.
• March 13 – the Rosneft refinery in Ryazan with a capacity of 17.1 million tons per year, which supplied fuel to the regions around Moscow, and the refinery in Novoshakhtinsk with a capacity of 5.6 million tons per year.

Against the background of a possible decrease in oil supplies from the Russian Federation and stocks in the USA, the May futures for Brent crude oil yesterday rose by 2.6% to $84/barrel (+3.7% for the month).

According to the weekly EIA report, crude oil stocks in the US decreased by 1.54 million barrels, although experts expected their growth by 1 million barrels. Gasoline stocks decreased by 5.66 million barrels against experts' expectations of 2.2 million barrels.

According to the EIA forecast, in 2024 crude oil production in the USA will grow by 2% compared to the previous year to 13.19 million barrels/day, and in 2025 by 3.5% to 13.65 million barrels/day.

OPEC experts in their monthly report published on Tuesday left almost unchanged their forecasts for oil supply and demand in 2023 and 2024. According to their estimates, world oil consumption in 2024 will grow compared to the previous year by 2.2% or 2.2 million barrels/day to a record 104.5 million barrels/day, while OPEC did not implement the agreed production cut.

According to Vortexa, oil exports from the Russian Federation exceed OPEC+ commitments by 420,000-500,000 barrels/day. On March 4-10, sea oil exports from the Russian Federation increased by 590,000 barrels/day compared to the previous week.

Attacks on oil refineries of the Russian Federation do not threaten the supply of oil to the world market, but reduce the domestic production of petroleum products, the shortage of which can contribute to ending the war.