Russian fuel embargo could lead to collapse of Ukraine’s economy, oil major warns

Russia’s ban on exports of oil and petroleum products to Ukraine in response to Kiev’s latest sanctions could be a catastrophic blow to Ukraine’s economy, according to one of the leading Ukrainian oil refiners.

“Now that the suspension of such supplies becomes a reality, it can really lead to the collapse not only in the fuel market, but also in the Ukrainian economy and undermine the national security of the country,” Ukrtatnafta said in a statement on Thursday. To stabilize the situation and provide the country with necessary oil products, the company has offered to boost processing the oil stock of the Caspian fields.

Commenting on concerns about the consequences of the embargo, Russian Senator Aleksey Pushkov noted that Kiev has long been willing to “tear apart everything” linked to Russia and purchase goods from its Western allies. He noted that Ukrainian authorities mistakenly thought that Russia wouldn’t respond to its “provocations” and warned that its “sanctions reserve is not exhausted.”

Russia remains Ukraine’s key trade partner despite Kiev’s claims of cutting economic ties
Moscow expanded restrictions on specific Ukrainian goods on Thursday. Apart from exports of oil, Russia banned some Ukrainian imports, such as clothes, bulldozers, pipes and pipe-laying vehicles, among other goods. Russian Prime Minister Dmitry Medvedev said that the new restrictions target goods worth $250 million as of last year.

Russia’s move came around a week after Kiev expanded its own sanctions against Moscow in addition to earlier restrictions on trade.