It’s the first time Europe has come after Russia’s huge energy sector, but it does not go far enough for Ukraine, which on Friday reiterated its call for an oil embargo after a rocket attack on a railway terminal in Kramatorsk, Ukraine, which killed about 30 people and injured hundreds, according to President Volodymyr Zelensky. “How much longer can Europe ignore the imposition of an embargo on oil supplies from Russia?” said Zelensky. The European Commission says about 45% of the bloc’s gas imports and about 25% of its oil imports come from Russia. The European Union has imported about 35 billion euros ($ 38 billion) in Russian energy since the start of the war. Coal has always been the easiest target: Europe imports almost half of its coal from Russia, but demand for the world’s dirtiest fossil fuels has already fallen and alternative supplies are more readily available than for gas. . However, shocking reports from Bucha and Kramatorsk have increased pressure on EU leaders to also consider banning or restricting oil imports from Russia.
How likely is it that oil will be banned?
Russia is the world’s second-largest exporter of crude oil, after Saudi Arabia, accounting for 14% of global supply last year, according to the International Energy Agency. Nearly two-thirds of its exports went to Europe before Russia invaded Ukraine. In March, Europe set a deadline of 2027 to wean itself off Russian gas and oil. But an oil embargo that starts much earlier is now firmly on the table. European Commission President Ursula von der Leyen told the European Parliament on Wednesday that the fifth package of sanctions “would not [its] last.” “Yes, we have banned coal, but now we have to look at oil,” he added. French President Emmanuel Macron was one of the first leaders to openly support a complete ban on Russian oil. Speaking to French television on Monday, Macron said there were “very clear indications” that war crimes had been committed in Bucha and that Europe “could not let it escape”. On Friday, French Finance Minister Bruno Lemerre told CNN that France did not want to wait to ban Russian oil after seeing the attack on the railway earlier in the day. “As far as France is concerned, we are ready to go further and decide on the oil embargo and I am deeply convinced that the next steps and the next discussions will focus on this issue of the Russian oil embargo,” he said. German Chancellor Olaf Solz said on Friday he believed Germany could stop importing Russian oil “this year”. Speaking at a news conference with British Prime Minister Boris Johnson during a visit to London, Solz said Germany was “actively working” to become independent of Russian oil imports, but added that it would take more time for Germany to move away from it. russian gas. More details on oil sanctions may not be released until Monday, when EU foreign ministers meet for talks. The options on the table include taxing oil imports and forcing buyers to pay into a guarantee account that Russia could use only under certain conditions. It can be difficult for all EU Member States to agree. Dependence on Russian oil varies widely in the European Union. Hungary is particularly exposed, and Viktor Orban, the country’s newly elected prime minister and longtime ally of President Vladimir Putin, could reject any proposals. “While we condemn Russia’s armed attack and we also condemn the war, we will not allow Hungarian families to be forced to pay the price for the war,” Orban said in a statement in early March. “Sanctions should not be extended to the oil and gas sectors,” he added.
Could Europe cope?
While sanctions on Russian gas are unlikely at this point because of the economic damage they would cause, Europe could better withstand an embargo on Russian oil. The United States, the United Kingdom, Canada and Australia have all announced bans on Russian oil, and a wider de facto embargo is already in place as banks, traders, shippers and insurance companies try to avoid financial sanctions. European oil companies, including Shell, TotalEnergies and Neste, have stopped buying Russian crude or will do so by the end of this year. The price of Brent crude oil, the world benchmark, soared in early March to just above $ 139 a barrel – a 14-year high – but has since fallen and traded around $ 100 a barrel. And Russia’s Urals crude oil traded at about $ 34 a barrel below that, a record discount. In recent days, rich countries have pledged to use their oil reserves to help lower prices and tackle declining Russian supplies. In March, the United States announced it would release 180 million barrels. ILO member countries have followed suit, adding another 60 million barrels to world reserves. Claudio Galimberti, vice president of analysis at Rystad Energy, said the impact of an EU oil embargo on Russia would depend on the extent to which it could divert exports to Asia. “If it manages to divert most of its oil exports from Europe to Asia, the impact could be – relatively speaking – not huge. Otherwise, it will completely cripple the Russian economy, as it is heavily dependent on oil exports.” , he said. CNN Business. While Europe accounts for more than half of Russia’s oil exports, China is the largest single buyer, accounting for about 20%, according to the IEA. – Chris Liakos, Niamh Kennedy, Mark Thompson, Emmet Lyons and Sugam Pokharel of CNN contributed to this report.
