Finance

EU still considering move on Russian oil embargo


The European Union is close to imposing additional sanctions on Moscow, which would almost certainly include a ban on Russian oil imports.

This was disclosed by an EU official, who did not want to be named, based on CNBC.

However, not all EU members support this initiative; Slovakia and Hungary are seeking exclusions. According to Reuters, Hungary’s Foreign Minister Peter Szijjarto stated on Tuesday that his country would not accept sanctions that would make receiving oil from Russia impossible.

Back story

  • The EU’s planned ban on Russian oil comes after Russia fought back against Western sanctions by demanding oil payment in rubles.
  • Hence, Russian energy company Gazprom cut natural gas supplies to two EU countries (Poland and Bulgaria) last week for failing to comply with Russia’s demands.
  • Furthermore, two EU nations have requested exemptions due to their substantial reliance on Russian hydrocarbons, and the EU will need to resolve the divisions among member states.
  • This is due to the region’s reliance on Russia for a variety of energy sources, notably oil. According to the region’s statistics agency, Russian oil imports accounted for around 25% of the bloc’s crude purchases in 2020.

What they are saying

The EU official stated that a delay to the planned ban would be worst than exemptions to some member states.

The source said, “It would be good to have everyone on board, but if it means delaying [oil sanctions] for everyone then that would not be good.”

The European Commission, the executive arm of the EU, is expected to put forward a proposal on new oil sanctions later on Tuesday or Wednesday morning.

“It clearly shows that they are not reliable suppliers, and that means that all the member states have to have plans in place for full disruption,” Kadri Simson, the EU’s energy commissioner, said Monday at a press conference.

It is an unjustified breach of existing contracts and a warning that any member state could be next,” she added.

What you should know

  • Hungary has been wary of imposing energy sanctions on Russia. When compared to other European countries, Hungary and its nationalist leader, Viktor Orban is perceived as having warmer relations with Moscow.
  • Commercial and energy arrangements have also been made between Hungary and  Russia. According to Eurostat, Hungary’s percentage of Russian natural gas imports has increased over the last decade, rising from 9.070 million cubic meters in 2010 to 17.715 million cubic meters in 2019.
  • It is worth mentioning that member states must unanimously accept new measures against Russia after the European Commission proposes them.



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