Russia still exports goods to the West and acts as a transport conduit for items from central Asia. What could go wrong?
Material leaving Russia and travelling through it is making headlines in mid-March 2024. More than two years after the launch of the broad-scale invasion, grain exports and petroleum products entering the EU from Russia were still in focus. The former now face embargoes in some countries such as Latvia and tariffs across the EU, while the latter has become the subject of a Financial Times expose that threatens to sour relations between Ukraine and some of its allies.
Grain
Russian grain exports to Europe are likely to see tariffs imposed of up to 50% in the near future. Until now, Russian and Belarussian grain had been brought into the EU little or no tariff. According to The Guardian, the impetus for introducing the tariffs had been a conversation between European commission president Ursula von der Leyen and Ukrainian president Volodymyr Zelenskyi regarding the possibility of Russia using cheap grain as a form of blackmail over the EU.
Von der Leyen told reporters on March 21t: “We have prepared a proposal to increase tariffs on Russian and collaboration imports of oil seeds and derived products. There are several good reasons for making this proposal. It will prevent Russian grain from destabilizing the EU market in these products. It will stop Russia from using the revenues from the export of these goods to the European Union. And it will ensure that illegal Russian exports of stolen Ukrainian grain do not enter the EU market.”
The Financial Times reported on March 22 that the U.S. government has been pressuring Ukraine to stop attacking Russia’s oil infrastructure. Washington’s concern is that Ukraine’s successful targeting of Russian oil infrastructure will drive up the price of oil in an election year. In particular, The White House is particularly concerned that Russia might decide to retaliate by closing down the CPC pipeline, which carries Kazakh oil through Russia. Russia shut down the pipeline temporarily in 2022 and is in a position to do so again in retaliation for Ukraine’s attacks.
The cost
Russian grain exports into the EU in 2023 equaled less than 2% of Europe’s own production, but it was still over 1 billion Euro of trade, according to msn.com, and that helps feed the Russian war machine. This might fall with the introduction of tariffs.
How much does Russia earn through transiting Kazakh oil through the CPC pipeline? Consider this: the pipeline handles approximately 1.2% of global supply. The figures are not publicly known, but we can assume that Russia does not let the oil transit for free.
The true cost, however, comes in what Russia does with the money. Overnight on March 21-22, Russia launched 90-some missiles and 60 Shahed drones, with eight strikes on Ukraine’s largest hydroelectric dam. As of the time of writing, five people have been killed, and 14 wounded, according to the BBC.
