Russia seeks new buyers after EU sanctions to cut oil imports

The government of Vladimir Putin of Russia has declared intention to divert its crude oil shipments to other countries after major customers in the European Union voted to drastically cut imports from the country.

Russia is also cutting off more volumes of natural gas supplies to Europe in retaliation of the countries’ ban reduction of Russian oil imports.

Key European countries to be impacted in the new gas squeeze include Germany which had expressed fears that banning Russian gas could affect its economy.

The retaliatory measures came after the European Union agreed to block most oil imports from Russia and the associated income flow the government in an effort to convince President Putin to halt his invasion of Ukraine.

European Council president Charles Michel had on Monday announced the deal to cut Russian oil imports to help constrict the government’s war financing.

The decision by EU’s 27 economies is expected to cut off around 70% of Russian oil immediately by halting tankers, and officials say it will eventually cease over 90% of Russian oil sales.

More than a 25 percent of the EU’s imported oil came from Russia last year.

Though the plan exempts oil transfers by pipelines for now, European diplomats say that trade could also ultimately be stopped.

The EU nations had earlier stopped importing coal from Russia, and have instituted five previous sets of unprecedented sanctions on Russian government officials and institutions like major banks. The U.S. and Britain have already barred imports of Russian oil.

Global oil exports earn Moscow hundreds of millions of dollars each day. That revenue provides a major share of Putin’s total budget for undertakings like his assault on Ukraine.

Russia also earns billions by pumping gas to Europe. In April, Putin shut off gas exports to Poland and Bulgaria in response to their support for Ukraine, leading to anxiety in Europe about the continent’s dependence on Russian energy supplies.

Following the decision of EU on Russian oil, the Organization of the Petroleum Exporting Countries (OPEC) may exempt Russia oil production quota as the group and its coalition members led by Russia are currently rebalancing the market to tame high prices.