Russia imposes sweeping trade restrictions on Ukraine

A ban on crude oil exports – and restrictions on
gasoline and other petrol products – were among the trade restrictions imposed
yesterday by Russia against Ukraine as of June 1, the Interfax-Ukraine news
agency reported. Import restrictions were also extended to machinery, textiles,
and processed metals, which was estimated by the Russian government to have
amounted to USD 250 mln last year.

The sweeping Apr. 18 trade restrictions – imposed in a
government resolution – also included restricted coal and coke exports to
Ukraine and a ban on pipe imports from Ukraine.

The restrictions mean that Russian exporters will have
to apply for special permission from the Russian Ministry of Economic
Development.

Evgeniya Akhtyrko: This latest
spiral in the trade war between Ukraine and Russian Federation will further
harm Ukraine’s foreign trade, with imports of oil products likely to be the
most negatively affected. In 2018, Ukraine’s imports of petrol and petrol products
(including gasoline) from Russia amounted to USD 2.1 bln, or 37% of total
exports in this group. This means that Ukrainian oil importers will need to
find other supplies within a very short period of time. The domestic economic
situation will also be harmed, with shortages on the retail gasoline market to
be very likely, as well as price fluctuations.

Zenon Zawada: These trade
restrictions are the latest in a series of measures taken by Russia this week
to apply political pressure on Ukraine on the eve of the second-round runoff
vote, scheduled for Apr. 21. Russia favors Volodymyr Zelenskiy becoming
president and is aiming to boost his vote count with the looming threat of
worsening trade, particularly with the industrial, Russophile southeastern
regions.

The Kremlin is also seeking to put Zelenskiy in a more
disadvantaged negotiating position, even before he takes the oath of the
presidency, and make it more all the more difficult for him to avoid harmful
concessions, or even capitulation, if he is to fulfill one of his key promises
of putting an end to warring in Donbas.