Barron’s has published an extensive piece on the impact of the U.S. and Europe cutting off and/or limiting Russian oil imports in the wake of the Ukraine crisis. 

Among its notes: 

  • Some analysts believe the current spike in oil prices could derail efforts to transition toward clean energy in the short-to-medium term as officials look to secure supply chain-resilience, but speed it up in the long run.
  • “The uncomfortable truth is resilience in supply chains has taken the front seat over saving the planet, and I am expecting nuclear, coal, shale and gas to get a new lease of life as the price of bringing Russia to heel and isolating them,” wrote Jeffrey Halley, Oanda senior market analyst.
  • The sanctions and subsequent shock to oil prices could also lead the U.S. and other major economies to adapt to the changing energy environment, said Paul Donovan, UBS Global Wealth Management chief economist in a call on Monday.“People will adapt, whether that is faster adoption of alternative energy, or sudden changes to improve energy efficiency,” Donovan said.
  • “While Russia’s economy will be hurt the most, Europe will likely fall into a recession and U.S. growth will be hit, with consumers feeling the most pain,” wrote Hussein Sayed, chief market strategist at Exinity.
  • Markets respond to the sanctions in real time. Since news of the ban broke on Tuesday, Brent crude rose around 7%, but prices will remain high and volatile for a few months, Wells Fargo analysts wrote in a research note Monday. The past week has seen one of the fastest rises in prices on record, with crude climbing over 30% since Russia invaded Ukraine.Russia is the third-largest producer of petroleum after the U.S. and Saudi Arabia, exporting almost 5 million barrels a day of crude oil in 2020, according to the U.S. Energy Information Administration. Almost half of those exports went to European countries, while 42% went to Asia and Oceania. The U.S. imported about 8% of its oil and refined products from Russia last year