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EKO HOT BLOG reports that the European Union has agreed to impose an embargo on most Russian oil imports after talks at a summit in Brussels.
The president of the European Council, Charles Michel, hailed the deal as a “remarkable achievement”, after tweeting on Monday night that it “immediately covers more than two-thirds of oil imports from Russia, cutting a huge source of financing for its war machine”.
Ursula von der Leyen, the president of the European Commission, said the ban “will effectively cut around 90% of oil imports from Russia to the EU by the end of the year” because Germany and Poland had committed to renounce deliveries via a pipeline to their territory.
Michel added that the package also included removing access to Swift payments for Russia’s largest bank, Sberbank; banning three more Russian state-owned broadcasters; and further sanctions against “individuals responsible for war crimes in Ukraine”.
Von der Leyen called the agreement on a sixth sanctions package was “an important step forward” and said the bloc had agreed a “massive investment in renewable energy” in order to compensate for the diversifying away from Russian oil.
The EU’s foreign policy chief, Josep Borrell, later tweeted: “A landmark decision to cripple Putin’s war machine. Our unity is our strength.”
Volodymyr Zelensky had earlier appealed to EU leaders to show unity against Vladimir Putin. At a summit in Brussels, EU leaders had been attempting to find a way to placate the Hungarian prime minister, Viktor Orbán, who has been holding up a deal on the latest sanctions against Putin’s war machine.
Under a compromise plan that was discussed at the summit, Russian oil transported through the Soviet-era Druzhba pipeline for Hungary, the Czech Republic and Slovakia would be exempt from the EU embargo.
In a press conference on Monday night, Michel acknowledged talk of a lack of European unity, adding: “I think that more than ever it is important to show that we are able to be strong, that we are able to be firm, that we are able to be tough in order to defend our values and our interests.”
Michel said the European Council and G7 was also ready to grant Ukraine €9bn to aid its post-war reconstruction and immediate liquidity needs.
However, von der Leyen warned that Ukraine needed €5bn a month just to maintain basic services and “… to give Ukraine a fair chance to rise from the ashes”.
The German chancellor, Olaf Scholz, said earlier he was confident there was a “good solution” on the oil embargo. Germany, along with Poland, has pledged to phase out Russian oil by the end of the year.
Officials close to the talks say the decision of these two large economies to forgo oil from the northern leg of the Druzhba pipeline means the EU oil embargo would cover 93% of Russian oil supply by the end of the year.
Meanwhile, Ukraine will need hundreds of billions to rebuild destroyed schools, hospitals, residential buildings and infrastructure.
The European Commission has proposed a jointly managed reconstruction body to be organised by Ukraine and the EU, with contributions from international institutions.
As EU talks went on, it emerged Russia would cut off gas supplies to the Netherlands on Tuesday, in the latest escalation of the energy payments row with the west.
The Dutch-backed trader GasTerra revealed the move after the company refused to meet the Kremlin’s demand of paying Gazprom in roubles. About 15% of Dutch gas comes from Russia.
Some EU leaders are already talking about a seventh round of Russia sanctions targeting gas. But some argue the EU rushed too quickly into an oil embargo.
FURTHER READING:
“We talked about oil, under pressure from [the] Baltics and Poland before having done our homework,” a senior EU diplomat said. “Under the pressure of this war we have maybe taken some steps too soon and we are now facing the consequences.”
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