The Energy Curtain – All Eyes On Fossil Fuel Prices This Summer

Summary:

In addition to the military support being given to Ukraine, efforts to halt any further Russian advancements continue to be focused on economic sanctions that aim to hamper Russia’s ability to finance the invasion. This Briefing Paper provides analysis of the pros, cons and effectiveness of current trade policy responses in terms of the short-term aim of cutting Russia’s oil rents and the long-term aim of creating a complete Energy Curtain between Russia and the West.

We find that whilst current interventions may go some way in meeting the target of decoupling from Russian oil and gas, they may not be effective in the aim of impacting negatively on Russian revenues, and in the process serve to raise energy prices. While high prices on fossil fuels are beneficial for the green transition, this is only true when there are viable alternatives to fossil fuels available.

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