Western sanctions cripple Russia’s oil and gas industry
Western energy companies have exited projects based or affiliated to Russia, while traders are boycotting Russian oil cargoes, mentioned the report
• Russia is now looking at India and China to support its energy industry
Russian President Vladimir Putin’s war in Ukraine is proving to be a costly affair as the heavy sanctions levied by the West hit its oil and gas industry.
Russia’s oil-and-gas sector makes up around 40% of its budget revenue. Russia is also the second-largest supplier of natural gas globally, accounting for 16.6% of global natural gas supplies in 2020.
The International Energy Agency reported that Russian oil output, including crude and condensates, is now expected to fall 15% this year to its lowest level since 2003.
Western energy companies have exited projects based or affiliated to Russia, while traders are boycotting Russian oil cargoes, mentioned the report.
The current sanctions could result in job losses for nearly 1.5 million people by next year, reported Wall Street Journal.
The world’s largest oil-services companies, Halliburton Co., Baker Hughes Co., and Schlumberger Ltd. Have wound down work or suspended new investment and technology deployment in Russia. This could have a major impact on the support system for the Russian energy sector which depends on these companies for 60% of its software services.
With no help from the West, Russia is looking at countries such as India and China to sustain its energy sector but the fear of secondary sanctions from the West could delay this response.
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