April 28, 2022, Opinion: "Oil and gas exports represent Russia’s key geopolitical strength, as well as its major source of hard currency revenues (1–3). At current prices, these are estimated at around US$1 billion per day (4), representing an important lifeline for an economy under heavy financial sanctions in response to Russian President Vladimir Putin’s invasion of Ukraine. The European Union (EU) buys 75% of Russian gas exports and 50% of Russian oil exports (5). An EU embargo on Russia would substantially undermine Putin’s geopolitical and economic positions. However, given a full embargo’s potential impacts on the EU, securing the approval of all EU countries is difficult. To limit Russia’s oil and gas revenues while keeping up the flows, the EU should instead introduce a tariff on Russian oil and gas imports. The tariff can be adapted to the economic and political dynamics of the conflicts."
HKS Faculty Author - Ricardo Hausmann