3 experts break down why Russia is set to lose its status as a top global oil power under an EU embargo: 'It could surely cripple the Russian oil and gas industry'

Experts told Insider that a European Union embargo on Russian oil would ruin production and topple Moscow as a top global oil power.

Russia has limited ability to store unsold oil, so an embargo would force cutbacks to production. The Kremlin warned last month that oil output could fall as much as 17% this year.

Matt Smith, lead oil analyst at Kpler, predicted that decline could happen within a year or two after an embargo.

Russia's ability to pump oil over the long term would be hampered if production were slashed because of the extreme climates of oil-making regions like Siberia.

An embargo undermines Russian status as it limits the flow of funding to Russia, making it more difficult to wield its power abroad, according to a Boston College associate dean.

Even if the embargo does not pass, bloc members could still impose bans on a country by country basis, which would still put a lot of pressure on Moscow.

Tomic pointed out that Russia's global standing is more important than how other world powers view it.

Tomic said that Russia would have to go through a regime change in order to reestablish trust and return to normal.

The countries are hesitant to do business with Moscow. The number of Russian oil cargoes labeled "destination unknown" has skyrocketed since the war in Ukraine began, as wary buyers look to avoid affiliation with the sanctioned nation.

The lack of foreign investment and technology in the oil sector is one of the reasons why international oil giants are pulling out of Russia.

An EU embargo on Russian energy would cripple the Russian oil and gas industry because Russia would struggle to find alternative buyers for all of its energy and would end up shutting in production, which is so reliant upon.

The EU wants to restrict European companies from providing services for Russian oil. According to the draft legislation, there will be a ban on shipping Russian oil to any country in the world.

It would be harder for Moscow to send supplies to new markets such as China and India because of this.

Ari Redbord, head of legal and government affairs at TRM and a former US Treasury staffer, said that the willingness of European nations to potentially crater their own economies to squeeze Russia is telling.

He said in an interview with Insider that the embargo was a move that was once almost unimaginable.