Europe has imposed a ban on Russian diesel fuel and other refined oil products, cutting energy dependence on Moscow and seeking to further erode the Kremlin’s fossil fuel earnings as punishment for its invasion of Ukraine.
Sunday’s ban comes with a price cap agreed by the Group of Seven (G7) allies – the United States, Britain, Germany, France, Italy, Japan and Canada.
The goal is to keep Russian diesel flowing to countries like China and India and avoid sudden price hikes that could hurt consumers worldwide while reducing Moscow’s budget and profits to fund the war.
Diesel is vital to the economy because it is used to power cars, freight trucks, farm equipment, and factory machinery. Diesel prices have been boosted by recovering demand after the COVID-19 pandemic and constraints on refining capacity, which has led to inflation in other commodities worldwide.
The new restrictions create uncertainty about prices as the 27-nation European Union replaces new diesel supplies from the US, the Middle East and India with Russia, which at one point supplied 10 percent of Europe’s total diesel needs. Those are longer journeys than Russian ports that stretch available tankers.
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Source: Aljazeera
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