Last week the EU announced a partial ban on oil imports from Russia as part of its sixth sanctions package against Moscow for its invasion of Ukraine. The EU embargo will affect about 75% of Russian oil imports immediately and 90% by the end of the year.
Russia’s war against Ukraine has both short- and long-term consequences for energy policy, the global economy and the existential battle against climate change.
The EU gets about a quarter of its oil from Russia, according to International Energy Agency (IEA) data, and news of the partial ban pushed already high oil prices even higher — bad news for consumer prices and the global economy.
But in the longer term it could mark the beginning of significant reduction in Europe’s dependence on Russian oil and gas and a further boost for alternative (non-carbon) energy development and electric vehicle (EV) sales.
In the U.S., the war in Ukraine has also bolstered the case for energy independence and fueled a surge in demand for EVs. At the same time, higher gasoline prices have contributed to a spike in inflation, with profound implications for both consumers and businesses.
“The shift from internal combustion-powered cars to hybrid and fully electric is one of the factors accelerating the sustainable energy transition from hydrocarbons to more renewable energy sources,” said Brent Potts, senior director of Global Marketing for the Oil, Gas, and Energy industry at SAP.
Even before this year’s stark rise in gas prices, consumers had begun buying more electric and hybrid vehicles. Together they accounted for 6.2% of all new vehicle purchases in the U.S. last year, up from 4.2% in 2020, according to auto industry research firm Edmunds.
Higher gasoline prices have supercharged this trend. In the first three months of 2022, EV registrations in the U.S. shot up an astonishing 60% even as auto sales overall declined 18%.
Global electric car sales in March 2022 — the month after Russia invaded Ukraine — were also rose 60% year-over-year, reaching a 15% share. The fastest-growing region was China, up 118%. Sales of EVs in China shot up 118% year-over-year to 26% share, while European sales were up 10% to 22%.
As Brent notes, this accelerated shift, “is requiring companies to rethink how they run their businesses.”