- Western imports of Russian natural gas and oil are bringing in “blood money” for Putin, an adviser to Zelensky told CNBC.
- Oleg Ustenko said the purchases ultimately funded Russia’s invasion of Ukraine.
- Russia is the world’s third largest oil producer after the United States and Saudi Arabia.
A senior economic adviser to Ukrainian President Volodymyr Zelensky said CNBC that countries importing oil and natural gas from Russia were ultimately financing the country’s invasion of Ukraine with “blood money”.
International governments have imposed massive sanctions on Russia, aimed at bringing the country’s economy to its knees and cutting off funding for its military. Measures have included blocking transactions from Russia’s central bank and banning some banks from using SWIFT for cross-border transaction communications.
But the sanctions have avoided targeting Russia’s oil and natural gas exports, on which many countries, especially in Europe, depend.
Oleg Ustenko, one of Zelensky’s advisers, told CNBC on Monday that countries that buy Russia’s oil and natural gas are “responsible” for funding Russia’s military actions.
“It’s extremely important to cut them off from these bloody cash receipts,” Ustenko said. “And we think that by doing that, we can really hit the Russians really hard.” Zelensky urged countries to boycott Russian oil and natural gas imports Monday.
Russia has the largest natural gas reserves in the world. The European Union gets about 40% of its natural gas of Russia, and the country sold about $100 billion worth of oil and gas to Europe in 2021, according to estimates by William Jackson, an economist at Capital Economics.
Russia is also the world’s third largest oil producer after the United States and Saudi Arabia, accounting for around 12% of world oil production.
The West in particular has been hesitant to stop imports from Russia because they would have to find other sources and prices could soar.
Secretary of State Antony Blinken told NBC on Sunday that the United States was in “very active discussions” with Europe on banning the import of Russian oil. His comments helped drive up oil prices the highest in almost 14 years.
Russian Deputy Prime Minister Alexander Novak told state television on Monday that a ban on Russian oil would lead to “catastrophic consequences” for the world market and push oil up to $300 a barrel “if not more”.
He also warned that Russia could halt gas pumping through the existing Nord Stream 1 pipeline which pumps Russian natural gas to Europe. Germany halted plans for the Nord Stream 2 gas pipeline after Russia sent troops to Ukraine.
Oil giant Shell on Tuesday apologized for buying a shipment of Russian crude oil, just days after the oil giant said it would limit its business with the country. The company also announced its intention to withdraw from the Russian oil and gas industry and close all of the company’s service stations in the country.
At the time of the purchase, Shell said: “We will continue to choose alternatives to Russian oil where possible, but this cannot happen overnight due to Russia’s importance in the EU. global supply”.