I think its the other way around, EU needs Russia. EU is an dysfunctional amalgamation of disinterest with poor natural resources and horrific demographics. Russia is energy rich, abundant natural resources, and a military powerhouse. EU technical knowhow + Russia's energy/resources produced an industrial power house. US/Nato turned Russia into Euro enemy #1, and now Europe just increased its production cost greatly and lost a big market in Russia. So Putin's shift to Asia is really EU's loss. US strategically benefit from Ukraine war in the long run because Euro will be less able to compete with USD. Asian coutries also wins because Russian oil will be readily/cheaply available to industrialize asia. India is also a big winner since oil is essential to infrastructure buildout.
I just enjoyed all the footages, it's like Truman's show on steroids.
In term of Economic hostility, Russia needed EU more than EU need Russia.
It's all about Alternative market. And the lost of profit that comes with.
First of all, while EU will suffer in the short term, it's most likely is not a catastrophic event for EU that is simply based on 2 assumption
1.) There are alternative supplier in lieu of Russian oil and gas (US, Canada and Middle East)
2.) The price inflated is about 20-30%, while it will take a hit on industry, it's not fatal, also, it will be incurred in end user anyway, most of EU product are not solely intent for EU market. EU government can and most likely will subsidize those affected in a short term basis just like they do with COVID 19 Pandemic Relief.
Which mean it will be projected with a price/cost ratio hike probably in 2022 and 2023, but then it will be stabilised as alternative market emerges.
On the other hand EU buy 41% of all Russian Oil and Gas Product. While Russia can transfer some of the deficit to China and/or India, but that is to a point. First of all, both China and India have their own oil and gas contract from other source (Saudi Arabia, Qatar, Iran and so on) You cannot just dump these contract and switch to Russian oil and gas completely, on the other hand, would India and China willing to go along the EU road to solely depends on Russian energy seeing how EU make a mess out of this, that is another question.
Second of all, Russia will be heavily discounting those energy product in order to sell it to China and India. Sure, right now oil and gas price is high so that loss is not really showing, but what if oil go down to $90 a barrel? You cannot expect Brent crude will forever be $120 a barrel, it
WILL come down, and what happen then? conventional estimate Russia is giving upward to 40% discount for China and Indian oil account, they won't be able to make any money if Brent Crude price go back down, which eventually US and OPEC will ramp up production and the logistic issue is going to be solved and price will come down.
Finally, would China and India willing to take off what EU and US left off? You are talking about a large amount of oil and gas (hundred of billions of dollars) on a yoy basis and the requirement are there, but it is not going to be the same demand used to be from EU. Setting aside whether or not China or India will ditch alternative market and solely import Russian energy product. You only buy something as long as you need it, and when oil and gas start flooding Chinese and India market, that appetite would probably last for a few year and will be lost once the need is satisfy and also stock with sizable strategic reserve, anything more than that is just waste, just because Russia have cheap oil and gas to sell does not mean China and India are going to buy it.
So in this situation, EU will be in underhand for a short run, but Russia is worse off in a long run. And I just don't see how EU or China/India would depends solely on Russian energy product ever again. Which mean Russia will turn into Venezuela 2.0.
