Is the EU ready to accept life without Russian diesel? Judging from the current situation, the answer is obviously no. Recently, the European Union has implemented a price limit order for additional Russian oil products. Unlike the December 2022 ban, this time it is mainly aimed at refined products of Russian oil, that is, fuel oil including diesel. Just like the natural gas crisis due to sanctions in 2022, European countries have encountered a diesel shortage this time. How to crack it? Europe had a great idea and sent a signal to China.

The European Commission announced that the EU has excluded third-party fuel oil products refined from Russian oil from the oil price limit order. Moreover, the maritime embargo will not apply to the export of third-party fuel oil products mixed with Russian fuel oil products. What does it mean? That is to say, if a third country first imports Russian oil, then processes and refines it into fuel oil such as diesel, and then sells it to the EU, it will not be subject to the ban. In addition, oil from a third country is mixed with Russian oil, and the EU no longer regards this oil as a Russian product, so the natural price limit order is useless.

Obviously, through this magical operation, the EU directly provided itself with a back door to bypass the price limit order and continue to import Russian oil-related products. Clearly, European countries are smarter this time after the energy crisis brought on by natural gas last year.

China and India are currently the main diesel suppliers to Europe, but a large part of crude oil imports comes from Russian oil. If the European Union's Russian oil ban is strictly enforced, European countries cannot buy diesel refined from Russian oil. Now the EU has issued a new policy, giving China and other countries a green light to export a large amount of diesel to Europe, and it can also stabilize the market supply in Europe.

The current shortage of diesel fuel in Europe has brought about a new energy crisis, which has had a negative impact on the European economy, people's livelihood and other aspects. In industrial production and daily life, diesel is a very important energy source. Although the price limit order will hit Russia's energy revenue, it is also a kind of "self-harm" damage to the European economy. The impact of the previous natural gas crisis on the European people has not subsided. Buying alternative diesel from China, India and other countries will increase transportation costs. The price of diesel in the European market will face price increases, which will bring more uncertainty to inflation. Various protests and strike pressures facing the government will follow.

This time, the conditions offered by Europe, that is, diesel oil obtained from China and other countries will not be affected by the price limit order, even surprised both the United States and Russia. Because Europe's move, first of all, actually violated the offensive and defensive alliance established with the United States, and opened a big hole for Russian oil exports. Including China, producers in other countries can refine fuel products and sell them to Europe without hindrance as long as they properly mix Russian oil with crude oil from other countries. It doesn't even matter if it is directly refined with Russian oil, the EU will accept it as it is ordered. This greatly reduces the meaning of the Russian oil price limit that the United States and the West have worked so hard to create.

Secondly, for the United States, the most terrible thing about the EU's move is that it may shake the foundation of the petrodollar. Because the reason why the United States has the hegemony to harvest capital all over the world and wantonly shear sheep to other countries, in addition to its strong political and military strength, is mainly supported by petrodollars, which are used by all countries for oil transactions. After Russia was sanctioned, it implemented a "ruble settlement order" against unfriendly countries such as the West, and began to promote local currency settlement for friendly countries that continue to import Russian oil, which is a blow to petrodollars. The main purpose of the price limit order is to warn other countries that if they do not comply, they will be sanctioned. Because Russia has stated that it will not succumb to Western sanctions, these countries will reduce or even stop buying Russian oil under the threat of the West, which will block Russia's local currency settlement strategy, thereby consolidating the status of petrodollars.

However, the United States never expected that it would be its European allies who took the lead in breaking through the price limit order. When China and India import Russian oil, they are constantly expanding the scale of local currency settlement. From the perspective of the United States, the EU's move is tantamount to providing assistance to China and Russia in their fight against the hegemony of the dollar. How can they not be angry?

For Russia, it was originally thought that from crude oil to petroleum products, it would no longer be able to enter the European market, so it is actively planning a new energy strategy to the east and south. It turns out that the Russian oil price limit order was officially implemented just on February 5, and within a few days, the EU itself took the initiative to open the back door. Then Russia only needs to continue to increase crude oil exports to China, India and other countries, and it can still be resold to Europe after refining.

The latest energy game between Russia and Europe shows that the EU’s strategic transformation of quitting Rosneft was not successful, and failed to find new alternative sources of the same magnitude, especially refined fuel such as diesel. Because from the perspective of substitutability, crude oil is easier. In theory, it only needs to expand imports from other oil exporting countries, but even so, the demand gap in Europe has not been completely filled. It is not so easy to replace refined fuel, which requires a certain chemical capacity to produce.

China surpassed the United States last year to become the world's top oil refiner. Then it is logical for the EU to seek to import diesel from China.Editor/XingWentao