Europe imported 3.8 million barrels a day from Russia before the war. In theory, European customers could replace those barrels from suppliers in the Middle East, whose exports now mostly go to Asia, as well as from the United States, Latin America and Africa. Meanwhile, cheaper Russian oil could take the place of the Middle East shipments to Asia.
But it would take time to make that adjustment. New supplies would have to be found elsewhere. Several large refineries in central and Eastern Europe rely on oil from a Soviet-era pipeline and would have to find another way of getting oil to make gasoline and other products.
EU governments also are gambling that Russia will not respond by turning off natural gas supplies to Europe. Russia has already cut off Bulgaria and Poland, ostensibly for refusing to pay in rubles.
Chances are that oil prices would go up for everyone because oil is a global commodity. That would mean higher prices at the pump and for home heating, less disposable income for consumers and be a drag on the economic recovery from the COVID-19 pandemic.
Russia would probably produce and export less oil after losing its biggest customer, Europe. That's because all of Russia's exports can't simply be redirected from nearby Europe to far-off Asia due to shipping and logistical constraints. It would mean a major reshuffling of the world's crude oil flows.
Buyers in India and China might avoid Russian oil if it means possible sanctions trouble with the West. And Western customers are already shunning Russian oil because they don't want to be associated with the country or can't find insurers or banks willing to handle dealings with Moscow.
On the other hand, some Asian customers might jump at the chance to snap up discounted Russian oil. Especially if the sales are off the books, as appears to be happening in some cases.
Energy is the main pillar of the Kremlin's budget. The Russian government got an average of 43% of its revenue from oil and natural gas between 2011 and 2020.
While the price for Russia's main export benchmark to Europe, Urals crude, has been discounted by $35 a barrel compared with international benchmark Brent, Russia's revenue losses have so far been limited because of generally higher oil prices.
Those foreign currency earnings are helping prop up Russian finances amid sanctions.
The latest sanctions would likely to have a "significant impact" on Russia's ability to keep funding the war because of its dependence on the European oil market, said John Lough, associate fellow with the Russia and Eurasia program at the Royal Institute of International Affairs in London.
"Further reductions of federal tax revenues on top of an already anticipated 5-10% decline in GDP from existing sanctions will have huge consequences for government spending across the board and may generate serious social discontent," he said.
But he warned the embargo also carried risks: "A sharp rise in the oil price could mitigate the effects on the economy if Russia is able to divert crude to non-European markets."
Meanwhile, Russia will try to exploit differences among EU countries, which could be worsened by high energy prices.
