Therefore, Russia can’t conduct international transactions, in which revenue from

oil and gas accounts for over 40% of Russia's revenue.

On March 8th, the United States announced the ban on all imports of oil and gas
from Russia into the US, and the UK declared an end to oil imports from Russia by
the end of 2022.

On May 30th, the European Union convened and agreed on the principle of
gradually reducing oil imports from Russia in the last 6 months of 2022, with a ban
on the majority of Russian oil imports into the EU by the end of 2022. However,
this order does not apply to oil transported through land-based pipelines. Hungary,
Slovakia, and the Czech Republic are still allowed to import oil via the Druzhba
pipeline. Croatia is permitted to continue importing Russian lubricating oil, a
product for its oil refining plants, until the end of 2023. Bulgaria is allowed to
import crude oil and Russian oil products by sea until the end of 2024.

On December 2nd, 2022, the G7 and Australia agreed to impose a price ceiling of
$60 per barrel on Russian crude oil shipped by sea. The price ceiling on Russian
oil aims to reduce revenue from Russia's oil exports and prevent the risk of
increasing global oil prices after the EU's embargo on Russian oil exports by sea
officially took effect on December 5th.

The actions of the EU, US, and some countries in not buying Russian oil and
participating in sanctions against transactions related to Russian oil have affected
short-term oil supply and demand worldwide because these countries have not
immediately found new suppliers.

Many researchers believe that the decrease in oil prices at the end of 2022 and into
2023 is partly due to the US, EU, and participating countries finding alternative
sources from the US, the Middle East, and Africa, reducing some disruptions in the
global oil supply. However, the main reasons are as follows:

First, most countries with large production and consumption markets like the US,
UK, EU, Japan, etc., are experiencing economic downturns, high inflation rates,
reduced purchasing power, decreased international trade, and implementing strict
measures to combat COVID-19 like China, leading to significant decreases in both
production and consumption. Therefore, this has impacted the decrease in oil
prices.

Second, to reduce inflation, most national banks of countries have to increase

interest rates, reduce money supply in the market, sell foreign currencies to
maintain the value of domestic currencies. Particularly, the US Federal Reserve
(Fed) has significantly increased interest rates to raise the value of the USD,
causing other currencies to depreciate, forcing central banks of countries
worldwide to raise interest rates to protect their domestic currencies, reduce
inflation. The appreciation of the USD makes the cost of purchasing oil, other
goods of these countries more expensive, forcing businesses to reduce costs and
production scale, consumers to reduce spending, and increase savings. This leads
to a decrease in demand for oil and reduces oil prices.

3.3. Predictions about the oil economy

3.3.1 Forecast of global oil supply and demand
According to OPEC's forecast, in 2023, global oil demand will continue to be
maintained at an average of 101.82 million barrels per day after unfavorable
signals for economic recovery and development gradually decrease, such as the
Russia-Ukraine conflict and the gradual lifting of economic sanctions by China.
The estimated total production output of non-OPEC and OPEC countries
producing non-standard oil is 72.55 million barrels per day (Table 6). The rest will
be supplied by OPEC member countries.

Table 6: Total global oil supply and demand in 2023 (unit: Million barrels/day)
According to the forecast by the US Energy Information Administration (EIA): In
2023, the estimated total global oil demand is 101.06 million barrels per day and
the total production output of countries is about 100.82 million barrels per day. The
shortfall of 0.24 million barrels will be taken from reserves.

3.3.2. Oil prices

According to EIA forecasts: Due to the decrease in oil from reserves being used up
at the end of 2022 and the beginning of 2023, coupled with information about
China starting to lift restrictions on COVID-19 prevention to resume production,
Brent oil prices are expected to rise above $90 per barrel in the first half of 2023
and will decrease by the end of 2023 when oil reserves are fully filled. Therefore,
the forecasted average price of Brent oil for 2023 is $92 per barrel, while WTI oil
is forecasted to average $86.36 per barrel.

According to JP Morgan's forecast: In 2022, the global economy experienced

significant shocks in oil prices, interest rates, inflation, so in 2023, the barriers to
economic growth are still tightening monetary policies that are increasing among
central banks, the Russia-Ukraine conflict has not ended, and China's level of
economic openness in COVID-19 prevention is still uncertain, so the average
forecasted Brent oil price in 2023 is $90 per barrel, and WTI oil is $83 per barrel.