Russia suspends diesel exports: Kremlin in crisis

Russia, the world's third-largest oil producer, faces significant oil shortages on its domestic market.
The Kremlin announced Monday that it will temporarily halt diesel exports for six months starting March 1.
Oil and gas exports account for 30% of Russia's revenue and a significant share of the country's GDP.
Russia controls some of the world's largest reserves of natural gas and crude oil.
Yet, Russia faces significant shortages in the domestic market, caused mainly by low prices and weak demand.
“To compensate for the demand for petroleum products,” Deputy Prime Minister Alexander Novak said through a spokesman, “it is necessary to take measures to help stabilize prices on the domestic market.” Additionally, Russian oil facilities have been targeted by Ukrainian missiles, further damaging the Kremlin's fossil fuel reserves.
read also Between appearance and resilience: how is Russia's economy doing? This is not the first time Russia has attempted to manipulate global oil demand.
Last year, the Kremlin worked with Saudi Arabia to cut oil production and artificially raise prices.
Overall, oil exports were reduced by 1.6 million barrels per day, about 1.6% of global demand.
Since then, however, oil prices have fallen significantly, and the G7 price cap imposed on Russian oil has further decreased the Kremlin's revenue.
A new phase in the energy war After the start of Russia's invasion of Ukraine, European nations banded together to stop gas imports from Moscow.
Unfortunately, the European economy was immensely dependent on Russian gas and oil, and its sudden shutdown caused serious damage to our industry.
Energy prices have risen, causing widespread inflation and a general economic crisis.
Two years after the start of the war, however, the situation is slowly changing.
Europe found new gas suppliers, namely Norway, the United States and African nations, driving prices down to pre-war levels.
Russia, on the other hand, appears unable to increase demand.
According to the International Energy Agency (IEA), demand for fossil fuels is expected to peak this decade and growth in 2024 is expected to decline by 1 million barrels per day.
If true, this would make Russian-Saudi sabotage almost useless.
China and India, which have replaced Europe as the largest importers of Russian oil, are buying it at a rock-bottom price.
Beijing and Delhi know that without them Russia would be economically devastated and are taking advantage of it as best they can.
read also How long can the axis between Russia and China last? Interview with Federico Giuliani Even after the war is over, it is highly unlikely that Europe will ever buy oil and gas from Russia again.
“The era of 30% Russian gas is over and will not return, whatever the outcome of the war and whoever presides in the Kremlin,” said analyst Jonathan Stern.
Whatever the outcome of its invasion of Ukraine, Russia needs radical economic change.
Article published on Money.it international edition on 2024-02-28 17:33:39.
Original title: Russia pauses oil exports (again) in desperate effort to boost global demand