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May 4, 2022

EU plans total embargo of Russian oil, but obstacles remain

Responding to the invasion of Ukraine, the EU commission plans its biggest sanction yet.

By Matt Farmer

EU Commission President Ursula von der Leyen has announced a total embargo on Russian oil imports within the EU within six months.

Speaking at the European Parliament, von der Leyen told delegates that the commission would consider a ban on European trade in Russia oil on Wednesday. She said: “This will not be easy, because some member states are strongly dependent on Russian oil; but we simply have to do it.

“So today, we will propose to ban all Russian oil from Europe. This will be a complete import ban, seaborne and pipeline, crude and refined.”

The proposed embargo would block imports of Russian crude oil “within six months”, while refined product imports would stop “before the end of the year”. Von der Leyen emphasised that the phase out would happen “in an orderly fashion, allowing us and our partners to secure alternative supply routes”. She also mentioned minimising the impact on global markets and European economies.

Hungary and Slovakia had previously opposed a European ban on Russian oil, partly because of the countries’ large dependence on Russian oil. In deference to this, the EU commission proposal would give both until the end of 2023 to embargo Russian oil.

However, the government of Hungary remains favourable towards Russia and still has a veto on these proposals. Responding to the announcement, Hungarian Government spokesperson Zoltan Kovacs wrote on social media that his country still opposed an embargo on Russian oil or gas.

Previously, Kovacs has said that Hungary has no short-term alternative to dealing with Russia. He told Reuters: “We do not see any plans or guarantees on how a transition could be managed based on the current proposals, and how Hungary’s energy security would be guaranteed.”

As a whole, the EU imports approximately two-thirds of its crude oil from Russia. Russian politicians have previously said that the country would block gas exports to European countries that block oil imports.

 Russia’s leadership has not yet reacted to the new plans. Meanwhile, oil markets rose by approximately 3% in response to the announcement. However, the comparatively small size of this rise implies that price rises following the invasion of Ukraine included the potential costs of disruption.

Also in her speech, von der Leyen announced proposals for further sanctions against Sberbank, Russia’s largest bank, alongside two others.

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