It’s not Russia’s invasion of Ukraine that sent oil prices into a tizzy, per se, but the avalanche of sanctions that the world community threw at the country in response.
So far, oil and gas is one of the only Russian commodities that the international community hasn’t sanctioned. Although Canada banned Russian oil imports on Monday, much of Western Europe is so dependent on Russian petroleum that they can’t turn off the taps without sending their own economies into a tailspin.
However, Russia’s increasingly financial isolation from the rest of the world is causing Western energy firms to voluntarily pull out of the Russian market: Shell, BP, and Exxon-Mobil, among others, are all announcing plans to hightail it out of Siberia. So even if virtually no governments are sanctioning Russian oil directly, the net effect is that it’s getting harder and harder for Russia to sell its petroleum abroad. As of this writing, Russia can’t find buyers for more than 70 per cent of its oil — even when they discount it to near-ridiculous rates.
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