Posted on: 05. 31. 22
It’s no secret that the United States is feeling the brunt of our government’s actions against the current Russia-Ukraine conflict. Sanctions have left the average citizen paying the highest gas prices since 2008, and we can’t tell when the pain at the pump will let up.
While we’re focused on our interests regarding the conflict, it’s essential to understand the global implications this situation brings to our industry.
A lot has changed since Russia invaded Ukraine in February. Let’s examine where our industry’s landscape is now and how it’s impacting different areas worldwide.
Current and Future Oil Bans Have Little Impact on Russian Exports
While the current US ban on Russian oil has increased their gas prices, Russia has found other markets to offset losses from the US and European nations, who have all but implemented sanctions.
As long as Asia and China continue to purchase crude oil from Russia, any future sanctions placed on Russia from the US or EU could have little impact on Russia’s exports.
Even with sanctions in place, Russian exports are back at pre-invasion levels as of April.
The Risk of Spills Has Drastically Increased
While Russian exports to Asia have benefited its economy, there is still a massive double-edged sword. Sanctions from the US, British, and European nations have forced Russia to practice ship-to-ship transfers in many trades with Asia.
Ship-to-ship transfers aren’t just an expensive way to export oil, but they also increase the risk of a deadly spill. Until sanctions end and Russia resumes trade with American and EU markets, this risk to the ocean is one that we’ll just have to keep an eye on.
West African Crude is Picking Up European Business
Although European countries have turned their back on Russian oil, they still need this essential resource from another supplier. According to Petro-Logistics, West African crude imports to Europe have increased by 17% as of April.
This record-high demand for Nigerian crude has increased oil prices in this area; Nigeria is a crude-rich nation with nearly 37 billion barrels of crude oil in its reserves. Many European countries believe African crude could be the solution that fills in the gaps caused by the Russia-Ukraine conflict.
Rising Costs Creating Global Social Unrest
The higher cost of crude oil is having an impact around the world. In the United States, it’s become a massive barrier in our battle against inflation. Similarly, in Europe, higher prices have practically stopped the continent’s pandemic recovery plans.
Even China, the world’s largest oil importer, may not reach its economic goals due to high prices.
Oil prices are taking a toll everywhere. However, with massive upticks, there is bound to be a drop in the future that begins to even out the impact oil prices will have on different economies.
Stay Tuned for the Latest Oil and Gas Updates From Pro-Gas, LLC
Back at home in the United States, Pro-Gas, LLC is still doing everything to provide our nation with cheap crude oil that keeps our communities running. From our fuel genies to portable NGL tanks, we offer oil and gas facilities the equipment they need to produce a quality product.
If you are a facility manager who knows your equipment needs an update, we want to hear from you. Contact us today to learn more about our product availability.
