How will the sanctions and embargoes imposed in connection with the Russian-Ukrainian war affect Azerbaijan?

Baku/10.03.22/Turan: The 15th day of Russia's aggression against Ukraine is underway. The United States imposed an embargo on imports of oil, gas and coal from Russia. Russian President Vladimir Putin issued a decree banning the export of state products until December 31.

How will the ban on oil and gas imports from Russia affect Azerbaijan, an oil and gas country? What will be the effect of the restriction of exports of Russian products? After all, the main importer of Azerbaijani wheat is Russia. Can the price of bread rise?

Economist, chairman of the Azerbaijan Democracy and Prosperity Party Gubad Ibadoglu answers these and other questions in the "Difficult Question" program.

According to him, the ban on the import of Russian oil and Russian gas can only have a positive impact on Azerbaijan. Because these bans ultimately lead to higher energy prices.

“Rejection of Russian oil and gas will lead to a shortage of these products and, accordingly, to an increase in prices for them. Azerbaijan has no problems with sanctions and embargoes. Prices for oil and gas in the world market are growing and Azerbaijan, which supplies these positions to the world market, will only benefit from this,” the economist believes.

In addition, the expert recalled, on March 2, OPEC + decided to increase daily oil production by 400,000 barrels in April 2022.

“As a result of this decision, the quota of daily oil production in Azerbaijan was increased by another 7,000 barrels. This means that Azerbaijan will benefit both from rising prices and from an increase in production. In the state budget of Azerbaijan for 2022, the price of Azerbaijani oil will be set at $50 per barrel. Now Azerbaijani oil is trading at about $130 per barrel. And this is not the final price. It is possible that it will rise to $150,” he said.

As for limiting the export of Russian products, according to Ibadoglu, this may affect the prices of goods that will be included in the "black list". “We will find out what goods were on this list one of these days (2 days were allotted for the preparation of the list and this period expires today - ed.), Ibadoglu said, adding that Azerbaijan is dependent on imports.

“For example, 100% of sunflower oil comes to us from Russia, over 80% of food wheat imports also come from Russia. Dependence on Russian imports is quite high,” he concluded.--0--