Russian oil: flaws in tax plan mean Europeans cannot duck moral choice

Russian oil: flaws in tax plan mean Europeans cannot duck moral choice

Military stalemate on the ground is matched by stasis in the global economic war against Russia. The Putin regime is still exporting plenty of oil and gas, receipts from which increase its chances of defeating brave Ukraine. Some experts, such as energy trader Pierre Andurand, back a counter measure: a direct tax on Russian energy products.

That, say proponents, would ensure western Europe still received the hydrocarbons it needs, while stemming finance for Russia’s brutal invasion forces.

It is a good idea — in theory. A tax on Russia’s oil should increase its price, encouraging consumers to seek cheaper sources of crude, says Harvard economist Ricardo Hausmann. Consumers should suffer less than Russia’s oil industry, which has limited choices in where to export its 8mn barrels daily of crude and fuels. Europe could also impose punitive taxes on natural gas exports.

Hausmann favours taxes over hydrocarbon import embargoes of the kind imposed by the US. Up to 1.5mn barrels per day of Russian crude exports have been lost since the invasion of Ukraine at the end of February, according to Rystad Energy. However, Russian oil is still available on world markets at the discount imposed by the “chilling effect” of US sanctions. The