The disaster for Russia is not the embargo on oil, but on insurance

Without insurance, these big naked machines can crisscross the oceans. | Angelos Tzortzinis / AFP

On May 31, after weeks of negotiations complicated by exemptions demanded by some countries such as Viktor Orbán’s Hungary, members of the European Union finally agreed to impose a massive embargo on Russian oil.

Demanded outright by Ukraine, which sees it as one of the most effective ways to drain Moscow’s finances and financially curb its war machine, this embargo could not have the full effect. – and further complicate the overall economic situation, as Joe Biden Treasury Secretary Janet Yellen noted.

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Because Russia has already largely redirected its oil flows to other countries, delighted to be able to buy cheap Russian oil on which they do not spit at all: India and China, in particular, have already largely replaced the others. old customers shunning now the crude of the Urals.

“A European embargo on the gross does not consist in the same way, it does not cause the alignment of approval chains,” Alan Gelder, an analyst for Wood Mackenzie, told the Wall Street Journal recently. But precisely: the European embargo did not consist only in the cessation of imports by the continent of Russian crude.

Some lack of insurance

The text adopted by EU members hides the sanction, which, more than the embargo, could permanently hurt the Urals’ oil exports – hence Moscow’s finances: a ban on European companies „Insurance and reinsurance, in conjunction with their British counterparts, to sign contracts with companies whose ships carry Russian oil.

Because as I explained recently …

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