The EU is cutting off imports of Russian oil products
AYESHA RASCOE, HOST:
Europe is taking another step to prevent Russia from getting money to pay for its war in Ukraine. The EU has already stopped buying Russian crude. Now it's going to stop buying Russian oil products, like diesel fuel. That's key to European transportation. NPR international affairs correspondent Jackie Northam has been covering the economic penalties the West is imposing on Russia, and she joins us now. Good morning, Jackie.
JACKIE NORTHAM, BYLINE: Good morning, Ayesha.
RASCOE: So tell us more about what's being cut off today.
NORTHAM: Right, so the EU is banning all imports of refined products made from Russian oil. And that, you know, sounds pretty dry and technical, but, Ayesha, these products are critical. You're looking at jet fuel, gasoline and diesel. And unlike here in the United States, many more vehicles in Europe run on diesel fuel, and so, too, does industry there. Last year, Europe imported more than half of its diesel or almost half of its diesel - pardon me - from Russia and not anymore. It's having to look elsewhere for these products. So this is a big decision by the EU. And it's because it wants to tighten, you know, the economic noose around the Kremlin and slow the money that's going into its war chest.
RASCOE: So that's Europe. But can Russia still sell these products to other countries?
NORTHAM: It can, yes, if the diesel and gasoline and these other products are sold at or below a price cap that has now been imposed by the EU and the G-7, the group of industrialized nations and its allies. So that means Western shippers and insurers and any marine services will be allowed to handle these refined products, as long as they stay at or below the price cap. So let's say for diesel, that's $100 a barrel. And, you know, you might wonder why they're creating this sort of loophole with the price caps. But this is a way to ensure that these products keep flowing to avoid any sort of shock to the markets but at the same time, limiting the amount of money that Russia makes. So, you know, all this is similar to a ban on Russian crude oil that was implemented in December, and it also has a price cap.
RASCOE: So if Russia - I mean, so if Europe is cutting itself off from Russian oil and is products, like, what other sources are available? Like, they had depended a lot on Russian energy. So where are they getting the oil and gas they need now?
NORTHAM: You know, what we're seeing happen is this global shift in the flow of crude oil and refined products. In other words, Europe is having to find new sources. And there are geopolitical implications. For example, the refined products, like diesel, could come from places like China. Also, natural gas - I mean, there's a lot of it now coming from the U.S. that's heading into Europe. The other thing is Europe is willing and able to pay much more for this energy than some poorer countries, such as, you know, Pakistan or Bangladesh. And those countries are not getting as much or any supplies of oil or gas now because of these sanctions that have been put on this Russian energy.
RASCOE: In the less than a minute we have left, do we know if these efforts to punish Russia's economy are having an effect?
NORTHAM: Well, you know, the ban on these refined products just started today. And Russia has been buying and storing this diesel and other products ahead of time. So it's too soon. But, you know, Western nations have been putting layer upon layer of sanctions on Russia over the past year - on its banks, individuals, businesses, you name it. And this ban is just the latest. Ayesha, sanctions take a long time to set in. But there are some time - you know, some signs that the Russian economy is starting to sputter. The question is, will it force Vladimir Putin to change his course on the war in Ukraine? And none of the analysts I've spoken with was confident of that happening.
RASCOE: That's NPR international affairs correspondent Jackie Northam. Thank you so much, Jackie.
NORTHAM: Thank you. Transcript provided by NPR, Copyright NPR.