‘Europe sanctions Russian oil.’ Statements like this are common in the media (including in my own articles) but they can be misleading. ‘Europe sanctions Russian oil’ makes it sound like there is a single actor, ‘Europe’, who has decided not to buy oil from another actor, ‘Russia’ – in this case because the former disapproves of, or wishes to punish, the latter.
But that’s not what’s going on.
What ‘Europe sanctions Russian oil’ actually means is that European states have prohibited European companies from buying oil from Russian companies. In other words, the embargo involves coercion of European companies by European states. This is not to say it’s unjustified (that’s a separate issue); I’m just pointing out how it really works.
Now, companies are beholden to their shareholders, or to tax-payers if they’re owned by the state. While individual CEOs may have strong, personal convictions for or against the sanctions, they have to do what is best for their shareholders – not what is best for Ukraine, NATO or the West.
So if companies can find a way around the sanctions, while still respecting the letter of the law, they’ll almost certainly take it. They have no interest in complying with the ‘spirit’ of the sanctions. This is particularly true under an oil embargo, since oil is one of the most useful products in the economy.
I previously discussed one way in which companies have been flouting the ‘spirit’ of the sanctions: importing Russian oil that has been mixed with Kazakh oil during transit, and for which they can therefore issue a Kazakh “certificate of origin”.
Recently, someone on Twitter gave this example:
Read more: Can Oil Sanctions on Russia Work?