It’s Time to Defuse Oil as a Weapon of War

Mar 22, 2022 | Jeff Turrentine
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Despite being the largest country on the planet, Russia doesn’t enjoy a diversified economy. Its economic health, in fact, depends almost entirely on its ability to produce and export energy products—primarily crude oil and natural gas. Though Russia is the world’s third-largest oil producer (behind Saudi Arabia and the United States), the country only consumes about 30 percent of what it produces, exporting the rest. Revenues from these exports account for more than a third of Russia’s federal budget.

Given the centrality of energy exports to the Russian economy, it’s not an exaggeration to say that oil is fueling Russia’s war machine. In recognition of this fact, President Biden recently banned all Russian oil and gas imports to the United States as part of a much larger sanctions package aimed at weakening the Russian economy, and Australia, Canada, and the United Kingdom have instituted bans of their own. Still, these actions are far from a crippling blow.

China and the European Union continue to purchase more than half of all the oil that Russia currently produces. And while the E.U. has imposed sanctions against Russia’s oil and gas industry by freezing new investments and joint projects, most member nations are simply not in a position to cut off the flow of Russian energy products entirely, at least not overnight.