Arrogance is expensive: The case of the European Union and Russia

By Tapiwa Gomo | 4h ago | 4 Min read

Until today, the Russian economy has endured and withstood the test of the sanctions and the country has remained one of the major global economic powerhouses. Of course, the question of how Russia withstood the war against the European Union (EU) and the North Atlantic Treaty Organisation (Nato) remains lingering as many had thought Russia was a pushover.

WHEN the Russian attack on Ukraine escalated in February 2022, the Western world went on a stampede to impose sanctions and all manner of punishment on Russia. Some West-inclined analysts predicted that the Russian economy would fall due to numerous trade restrictions imposed on the country.

It is not only Russia’s ability to withstand a war against Nato and its allies that is baffling. When the Russian attack on Ukraine started in February 2022, the European Union (EU) went on an over-drive, imposing sanctions on Russia to weaken its ability to attack Ukraine. When the EU did that, it knew that Russia was one of its major and essential energy trading partners and retaliation would collapse the entire bloc.

Russia is a major gas supplier to Europe and the world. Given the cold weather conditions in Europe, it is hard to imagine life without Russian gas, but they imposed sanctions anyway. European countries have had to find innovative ways to navigate their sanctions and access Russian gas. This makes everyone wonder about the relevance of sanctions.

However, the most folly of them all is that Europe is now buying Russian oil from India. After imposing sanctions on Russia, countries within the EU bloc cannot trade with Russia even though they need a lot from the country. Europe needs Russia for its energy supply but its arrogance means that Europe must pay more to India to access Russia’s oil.

In 2024, the EU procured fuel worth almost 20% more than it did in 2023 from three major Indian refineries working on Russian crude oil, according to the centre for the Study of Democracy think tank.

And India has become the largest exporter of oil products to the European Union. This is due to several factors, including that Europe needs oil, which Russia has in abundance and also that Russian crude oil is available at a discount to other international trading partners due to the price cap.

India, a growing economy and also a member of the Brics, is taking advantage of the sanctions on Russia and the refining loophole by exporting refined Russian oil to the EU knowing that the latter has no choice as it needs energy to sustain its industry.

Keep Reading

The European Union and its allies are walking on a tightrope with Russia. Politically, they want to see a weakened Russia, while economically, they cannot do without its supplies. Over the past three years, the EU has been working hard to reduce funding to Russia and to sabotage its economy but that has not worked.

In fact, it is the EU that has paid the price for its actions on Russia, while India has reaped the benefits. Russia has not stopped selling its oil since the war in Ukraine began. When sanctions were imposed on Russia, it turned to its Brics friends for trade, while Europe engaged India to access the Russian oil. For those reasons, in three-quarters of 2024, India’s exports of fuels to the EU increased by 58% year-on-year.

That has made India the leading oil supplier to Europe with its exports almost double the pre-Ukraine war period. As a result, the EU is paying more for Russian oil made in India and that is helping Russia to sustain its economy and the war in Ukraine. Technically the sanctions imposed on Russia are affecting the EU more than Russia. EU is the biggest loser from its capricious behaviour.

Nearly three years since the Russia-Ukraine conflict started, it is clear that there is no winner in a war that was, from the onset, unnecessary. People are suffering and are being displaced. Taxpayers are forced to fund an unnecessary war in billions of dollars. Global economies have suffered because of the unnecessary war. This has pushed millions of people into poverty and destitution across the world.

The EU is a major global trading hub which means any price hike in the energy sector will push the prices of goods and services everywhere upwards. Again, this is caused by unnecessary decisions. And ultimately, the EU and the world are funding the war in Ukraine — all thanks to EU’s lack of foresight. And Russia is laughing all the way to the bank.

Tapiwa Gomo is a development consultant based in Pretoria, South Africa. He writes here in his personal capacity.