Russia’s energy profits will skyrocket

Lavrov said he expected profits from Russia’s energy exports to skyrocket this year.

“This year, we will significantly increase our profits from energy exports“, TASS news agency quoted the Russian foreign minister.

On June 3, the European Union (EU) officially approved an embargo on oil from Russia, and introduced other sanctions against many of the country’s major banks and media outlets.

Specifically, EU countries will gradually phase out the import of Russian crude oil in 6 months and other refined products from oil in 8 months. However, some countries that are landlocked and have no choice but to source from Russia will be allowed to import Russian oil via pipeline – including Hungary, the Czech Republic and Slovakia. These countries must comply with strict regulations not to resell crude oil and refined petroleum products to third parties or other European countries.

Particularly, Bulgaria is allowed to continue to import Russian crude oil and oil products by sea until the end of 2024 due to geographical characteristics. Croatia is allowed to continue importing Russian oil for the operation of its refineries until the end of 2023.

The new sanctions also prohibit companies in the EU from funding or guaranteeing the transport of Russian oil to third-party countries. This prevents Russia from continuing to export crude oil and petrochemicals to other parts of the world given the EU’s role as an important supplier of those services.

According to European Council President Charles Michel, the embargo will affect about 75% of Russia’s oil imports and this proportion will increase to 90% by the end of the year.

On June 2, Russia’s Foreign Ministry warned that the EU’s ban on Russian oil could destabilize global energy markets and be “self-destructive” for the union.

Currently, more than 60% of Russia’s oil that the EU imports is transported by sea, with about 30% remaining through the Druzhba pipeline.