Oil Embargo Comes Into Effect, Causing Euro To Surge Significantly Versus RubleDecember 5, 2022
The latest trading session for the EUR/RUB has turned out to be a promising one for euro investors. On Monday, the trading value of the euro surged against the ruble, bringing hope to Europe.
For a long time, the Russian ruble has continued pressurizing the European euro due to recent developments.
As Europe was dependent on Russia for fuel, the latter did the obvious thing of cutting 95% of the energy supply to the continent. What Russia did was a response to the sanctions filed by the UN against the country.
Therefore, the European continent continued facing an energy crisis that has constantly pulled the continent’s economy lower.
Europe is finally making a coming back and it has done so in the form of pushing the euro.
Euro Surges against the Ruble
In the latest trading session, the value of the euro has hit a high figure versus the Russian ruble. The price chart shows that a five-month high has been hit by the euro against the ruble.
The price of the euro surged just as the EU embargo came into full force against Russia. The restrictions were long-awaited by the European Union over Russia.
The restrictions were mainly against the import of oil products and oil from Russia into Europe.
Following the implementation of the oil embargo, the value of the euro rose against the ruble. The euro surged to a high of 66 rubles against the ruble.
This is the first time since late July that the euro has hit such a high exchange rate against the ruble. The pair recorded a 2.1% surge in the Monday trading session to come up to this level.
Eurozone is Out of the Worst Energy Crisis Scenario
The euro price also gained momentum from the claims that the Eurozone will finally be able to avoid the worst-case scenario in terms of the energy crisis.
The EU will be able to ration enough energy in the running year which will help boost the economy of the entire continent.
The EU will be able to achieve this without the support of Russia, which was its biggest supplier of both natural gas and liquid fuels as the year 2022 began.
Oil Import from Russia
Until the oil embargo against Russia came into force, the continent had been importing up to 1 million oil barrels every day from Russia.
However, with the developments that have taken place between Russia and the EU due to Ukraine, the EU importers have decided they will stop doing that.
With the EU no longer importing fuel from Russia and looking for alternatives, things will become even more difficult for Russia.
The EU took its Time
According to the reports, the bloc had been trying to make it happens for a long time. They spent months deciding how they will be doing it and when will the embargo come into force.
Finally, the EU has enforced the embargo and as a result, it will be importing oil from sources other than Russia.
Europe needs to do a lot of Work
The situation is very critical for the EU at the moment because the past couple of years have highlighted what the region has lacked for years.
The EU has mainly remained dependent on other countries and regions for supplies. A major example is the semiconductor shortage.
The semiconductor shortage began as the year 2020 came to an end and even now, it is in the recovery stage.
Like the rest of the world, the EU also faced major problems due to the shortage of semiconductors. It was realized that the EU was only manufacturing 5% of its overall semiconductor needs.
The rest of the supplies for semiconductors were being imported from the rest of the world. The major semiconductor suppliers for Europe were the United States and China.