Since the outbreak of war in Russia and Ukraine, we have seen a severe economic impact on the price of fuel and sources of energy across Europe. This week, Europe continues to take steps to separate from Russia, and has banned any imports of diesel fuel and other products from oil supplied from Russian refineries. Europe has already begun cutting ties with Russia, and has reduced their imports by almost half, going from Russia's supply of 50% of total imports, down to 27% of total imports. Many European nations are also discussing putting a price cap on Russian diesel going forward. What does this mean for the global economy?
This will have a major impact on the flow of fuel throughout Europe and the rest of the world. Europeans will continue to find new suppliers for oil, and Russian diesel exporters will have to find new clients to purchase their product. If they do not, this will likely have a significant impact on the supply of diesel, and the price of Russian diesel. In addition, if European buyers are now looking to enter a different diesel market with an alternate supplier, there would be more competition with other importers, and prices will continue to skyrocket. Fuel and energy are significant forms of bargaining and incentives among agents. If there is a threat to the supply and cost of fuel, there is a threat to the economy as a whole, and can cause significant damage.
https://www.usnews.com/news/business/articles/2023-01-30/will-europes-ban-on-russian-diesel-hike-global-fuel-prices
8 comments:
Overall, a great post! I think that for a while, all eyes will be on Russia and Ukraine and global ties to Russia's economy. I find it intriguing to learn that the plan going forward is the slowly reduce their reliance on Russian fuel as they continue to find other countries to export fuel from. I think the next step for Europe will be to find a cost-effective alternative to Russian fuel, which sounds as though it will be a challenging feat. I am curious though as to what exactly would be the outcome of putting a price cap on Russian fuel.
Great post, super important topic. I do think that the European ban on Russian fuel is a good thing morally, but there are huge economic costs to this decision. Most places are extremely dependent on oil and gas and the rise in energy prices is only going to make those economies suffer even more. It is also very expensive to revamp the global energy system, so I think that it will take multiple years for the WEF and EU to fully implement their green energy plans for the world's economy. This "green" change I think will spillover into other business sectors which does open the door for investors to learn about companies leading the transition into an AI, Green energy, and Web 3.0 led world.
Great topic that can lead to opposing ideas. As a European country, what is the correct step to make in the case when war is going to your next door? Cutting down the imports and banning Russia's oil supply that can lead to a severe economic impact on the country's economy, drastically increase the prices of oil, and in the general cause, high inflation, or continuing a partnership with Russia, import its goods and services, oil, knowing that each penny given to Russian government will go to funding Ukrainian invasion and kill thousands of innocent people. I think that European countries are doing the great moral job by cutting Russia from all economic spectrum, banning their most important sources of economy, (gas and oil), and sanctioning Russian companies and oligarchs. The outcome might hurt Europe's whole economy, but I, like many European leaders agree that it is a morally correct decision
This was a great news topic to report on as it is severely affecting a lot of economies in Europe right now. My post had to do with how Germany's economy in its last quarter actually shrunk unlike the previous two quarters and one of the two or three major reasons for this was the lack of gas Germany was receiving from Russia. This shortage of gas was obviously due to the war which this post further clarifies and explains why it is happening. I also liked how this touched on how European countries are having to look for other sellers of gas which can be a struggle and take a while to complete therefore affecting the countries' economies. Overall very interesting read and it did a great job of covering the specifics of the Russian gas shortage in Europe.
Very Interesting and important topic to post. Europe banning Russian fuel has been a huge factor in determing whether or not there will be a recession. I recently just posted an article that talked about Europes economies and how they are doing well at the moment, the big factor for most of the countries was the scarce amount of gas that they had.
Although I find the ban on Russian Fuel to be a worthy moral and political ambition, the fundamental fact is that due to over-reliance on Russian oil and oil products by European nations since the fall of the Soviet Union, attempting to establish a blanket ban would only result in an incredible rise in the price of oil and oil products in the region, leading to further inflationary pressure in the respective European economies, and would further entrench the cost of living crisis that Europe is going through.
However, I would like to reiterate the fact that there exist many other benefits to placing a ban on Russian oil that can't be strictly quantified in an economic sense, as this situation has a deeply political and moral side to it.
This is an exciting post! The banning of oil from Russia is noble and morally advantageous in my opinion and is a small blow compared to the struggle Ukraine is going through. I am wondering if Norway's massive oil reserves will be of any use or help during this crisis. Norway has a production limit at the moment and could possibly increase its limit and bolster the European supply domestically.
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