Russia bans oil exports to Ukraine

 Russia bans oil exports to Ukraine

The Russian government has banned exports of Russian oil and petroleum products to Ukraine, Russian Prime Minister Dmitry Medvedev said.

"[The Russian government] bans exports of Russian oil and petroleum products to Ukraine," the PM said at a cabinet meeting.

He also declared extension of the ban on imports of certain Ukrainian goods. "We are forced to protect our interests and strike back," Medvedev noted.

"I have signed a government decree on that. We are expanding the ban on imports of certain types of goods to Russia, which will be applied to Ukrainian engineering products, consumer goods, metal products, the cost of which totaled almost $250 mln last year," TASS cited him as saying.

Medvede recalled that the "Ukrainian Cabinet of Ministers took another unfriendly step towards our country,expanding the list of Russian goods prohibited for import into Ukraine." "Under these conditions, we have to defend our interests and take retaliatory measures," the head of Cabinet stressed.

The executive vice-president of NewTech Services, professor of the Gubkin Russian State University of Oil and Gas, Valery Bessel, speaking to Vestnik Kavkaza, noted that this decision has a political dimension. "Many of our political analysts stressed that the export of oil and petroleum products to Ukraine should be banned, because we sell diesel and gasoline to Kiev, which is used by the Ukrainian army. In economic terms, the ban is not so significant: of 400 million tons of oil exported by Russia in 2017 (earning almost $250 billion), less than 10 million tons were sent to Ukraine. It is clear that the export of hydrocarbons to Ukraine was to some extent dangerous in corrupt terms, because certain oligarchic groups were feeding from it," he said.

"It will have almost no effect in financial terms - we will compensate for these deliveries to another direction, in particular, to China. Russia will lose nothing. It will have no effect on oil prices as well, since these are insignificant volumes on a global scale. We have a huge Chinese market, which will buy everything that we offer, since it has a significant shortage of fuel," Valery Bessel added.

A scientist of the Institute for Economics of the RAS, Alexander Karavaev, in turn, noted that Ukraine can replace Russian oil with Belarusian supplies. "Everything will depend on the interaction of Russian companies through Belarus. By the way, Ukraine supplies most part of oil from Azerbaijan, so more likely it's about strengthening Russia's bargaining position. It will take affect from June 1, that is, after the new leadership of Ukraine is elected, which means that they are intended to show Kiev the need to turn in its foreign policy towards Russia and dismiss those anti-Russian sanctions, which Ukraine has started to introduce," he said.

"Such measures should have been taken earlier. Ukraine still remains our third trading partner among the CIS countries after Kazakhstan and Belarus, despite the conflict. The volume of trade is about $14 billion, of which about 10% is oil products. I don’t see any another explanation of why the ban on exports of oil and petroleum products is introduced now, except that it sums up the entire policy of restrictions and prohibitions, so that the new government takes into account Poroshenko’s economic policy and could start relations with Moscow from scratch," Alexander Karavaev recalled.