Russia Petrol Exports: Russia imposes complete ban on petrol exports for so many months, creates panic in global oil market

Russia Petrol Exports: Amidst the oil crisis arising out of increasing military tension between Iran and America, oil exporting country Russia has taken a major decision and banned the export of petrol with immediate effect. The main objective of this order issued by the Russian government ‘Kremlin’ is to control prices in the domestic market and ensure supply. According to the Russian Energy Ministry, this ban is currently imposed for 6 months so that the maintenance of refineries and to meet domestic demand can be done.

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Main reason for ban

attack on refinery
Due to the ongoing tensions between Ukraine and Russia, several of Russia’s major oil refineries have been damaged by drone attacks, causing a reduction in production.

impact of iran war
Global oil routes (such as the Strait of Hormuz) have come under threat due to increasing tensions between Iran and the US. Russia does not want there to be a fuel shortage in its own country during a global crisis.

farming season
In Russia, farming work increases during spring, which requires large quantities of diesel and petrol.

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impact on global market
In the international market, the prices of Brent crude oil are likely to cross $90 per barrel. Although Europe has imposed several restrictions on Russian oil, petrol prices may increase in Europe also due to reduced global supply. Oil ships now have to travel through long and expensive routes, due to which the cost of freight transportation has also increased.

impact on india
India, which imports a large part of its needs from Russia at concessional rates, may be affected by this decision. Although, this ban is mainly on ‘Finished Petrol’, but due to the increase in global prices of crude oil, the possibility of increase in the prices of petrol and diesel in India has also increased. India mainly buys crude oil from Russia, so there is no immediate huge crisis. If the prices of crude oil increase globally, then the prices of petrol and diesel may also increase in India, due to which freight transportation will become expensive and the prices of common goods will increase. Due to oil becoming expensive, demand for dollars will increase, due to which the Indian rupee may weaken.

Report: Sushil Kumar Sah