The total EU embargo onenergy Russianbetween gas and oil, it wouldn’t work. It might actually turn out to be a boomerang. The finance minister To use, Janet Yellen firmly opposes the way of stopping Russian gas purchases by the Old Continent, which is heavily dependent on this front To fly. L’European Union it takes 40% of all the gas it imports from Russia. And among the most dependent countries are Germany and Italy. Not only. About 26% of the oil imported from the European Union comes from Russia.
Russian gas, stop in May? Scenarios and risks: The Italian strategy between rationing, reserves and coal
Yellen: “Europe is cautious”
“Europe clearly needs to reduce its energy dependency on Russia, but we need to be cautious about thinking of a full European embargo on oil imports,” Yellen said, explaining that a total European embargo could be counterproductive with the increase on prices in Europe and in the rest of the world without severely affecting Russia, which would continue to sell to friendly or neutral countries at higher prices. “This would increase global oil prices – Yellen said, always sketching a hypothetical scenario of a total European embargo – and this would have negative repercussions for Europe and other parts of the world”. Not only. “On the contrary, it could actually have a very small negative effect on Russia, which, even if it exports less, will sell at higher prices.” Of course, “the proceeds from the sale of oil and gas are an important source of income for Russia,” Yellen later conceded that “it would make sense – she added – to find a way to reduce the revenue from these sales”. “This would be the ultimate goal of the embargo,” he concluded, “but we need to find a way to achieve this without exposing the entire globe to a rise in energy prices, that would be ideal.” And we’re all trying to think about that together.”
THE UNIQUE BLOCK
A push that can only influence the decisions of the coming weeks. Both Italy and Germany are aware of the severe impact that the decision to shut down Russia’s gas supply is having, particularly on their respective manufacturing sectors. But the vision must extend to Europe. Let’s try to imagine what would happen if all of Europe suddenly fell to Russian gas. It would have to find 155 billion cubic meters of gas elsewhere, all of which are unavailable. Not to mention the hypothetical avalanche of prices and thus the costs that families and companies would have to bear. As Yellen Gut says, the impact would also fall on oil, again with severe consequences. That’s actually what Yellen says. And he says so in terms of the indirect fallout for the United States, which, while autonomous on the energy front, would pay for the long wave out of Europe amidst recession and inflation.
THE HUNT FOR ALTERNATIVE METHANE
This does not mean that Italy, like other countries, is not doing well in finding alternative sources of Russian gas. The step is required. But autonomy takes time. And a few years ago it is an impossible goal to achieve. Germany has said it, and our Minister for Ecological Transition, Roberto Cingolani, has also made it clear. In the meantime, it’s a matter of avoiding tears, averting some recession.
“We will follow the decisions of the EU, if they propose a gas embargo, we will be happy to follow the EU on this instrument”, because “we want the most effective instrument to enable peace”. But since the beginning of the war in Ukraine, Draghi has argued that sanctions must also be sustainable. And he also uses an effective image to point out the difficult crossroads for those seeking peace and quiet: “Do we prefer peace or the air conditioning on? That is the question we must ask ourselves.” Furthermore, between the estimates of the Def and those of the Bank of Italy, it is clear where the risks can go. It’s a bit like showing the austerity film of the 70’s. All poorer for two years compared to last year for the Bank of Italy. The economic recovery has been reduced to a fifth of what was expected for the government. And who knows if it’s just that, with inflation already starting at 7%.
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