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EU leaders agree to ban Russian oil imports

May 31, 2022

German Chancellor Olaf Scholz said the decision sent a "strong signal of unity." However, the compromise took almost a month to reach, on a gradual ban that will not apply to pipeline imports.

A photo of the Russian oil producer Gazprom Neft's Moscow oil refinery on the south-eastern outskirts of Moscow
Ukraine has repeatedly called on the EU to stop buying Russian fossil fuels that fund the invasionImage: Natalia Kolesnikova/AFP/Getty Images

EU imposes new sanctions on Russia

The 27 EU member states agreed to a new sanctions package overnight into Tuesday morning covering more than two-thirds of Russian oil imports to the bloc, European Council President Charles Michel announced.

Michel said on Twitter the arrangement will cut "a huge source of financing" for Russia's "war machine and put "maximum pressure on Russia to end the war."

German Chancellor Olaf Scholz told a press conference Tuesday afternoon he welcomed the oil embargo, which had been "mutually agreed" by EU member states.

The chancellor said that the sanctions would further pressure Russia to end the war in Ukraine and withdraw from the country.

Scholz added Germany was sticking to its goal of no longer importing oil from Russia by the end of the year.

The bloc also agreed on removing Sberbank from the SWIFT international payment system. Sberbank is Russia's largest bank and is majority state-owned.

What is now the sixth round of sanctions on Russia following its invasion of Ukraine had been stalled for almost a month over tense disagreements within the bloc due to varying levels of dependence on Russian-sourced energy.

Hungary led the members in opposition, including Slovakia, the Czech Republic and Bulgaria, who have said they cannot halt imports entirely, and certainly not straight away.

Hungarian Prime Minister Viktor Orban, one of Russian President Vladimir Putin's closest allies within the EU, had demanded that the oil embargo question be taken off the summit's agenda. His country relies on Russia for 60% of its oil and 85% of its natural gas.

Compromise on Russian oil by pipeline 

The agreement on the oil embargo came after a compromise imposing sanctions only on Russian oil that arrives by sea but not by pipeline. Hungary is dependent on the Soviet-era Druzhba pipeline for its oil. 

Russian budget will lose 25% of revenue due to EU embargo, says oil expert 

Orban had called this plan a "good approach" on Monday, while insisting that Hungary "has to have the right to get Russian oil from other sources" in case "something happens to the pipeline carrying Russian oil."

German Chancellor Scholz said Tuesday that a temporary exemption on oil deliveries arriving by pipeline to a few countries "was important," as countries like Hungary and Slovakia will need to "take transitional measures" and " it will take some time for them to prepare."

"We want them to do so, and this has enabled us to agree on a common decision," the German chancellor said.

On Tuesday, the European Commission said sanctions on seaborne imports of Russian oil would be imposed with a phase-in period of six months for crude oil and eight months for refined oil.

European Commission President Ursula von der Leyen said Tuesday that EU member atates were "coming together to strengthen defense, ensure reliable and sustainable energy supply." 

"It is solidarity and cooperation that are at the heart of any successful strategy to deal with Russia as a non-reliable supplier," von der Leyen told a press conference Tuesday in Brussels.

"It is a wind-down period in six to eight months until the end of the year" Von der Leyen said. "It's not a full-speed, abrupt end during that time, but a clear reduction of oil already."

Von der Leyen said, for example, Germany since the beginning of the year has gone from using 40% of Russian oil to 12% for its demand.

"This shows that working hard on not renewing contracts and looking at other suppliers, you can fill this wind-down period better."

However, there remains the issue that banning oil by ship could trigger a price surge that would hit countries such as Belgium, the Netherlands and Germany, forcing them to pay more for oil than Hungary. Von der Leyen said Monday that this concern was addressed during talks. 

Reinhard Bütikofer, a member of the European Parliament's Foreign Affairs Committee with Germany's Green party, had told DW as talks were underway that "I don't think we should fantasize about moving around Hungary" and that the position of Hungary and other landlocked countries was being taken into consideration. 

What else was on the summit's agenda?

Ukrainian President Volodymyr Zelenskyy, who has repeatedly called on the EU to halt all fossil fuel imports from Russia, addressed had appealed to the summit via video link prior to the compromise deal, urging them to find common ground.

"All quarrels in Europe must end, internal disputes that only encourage Russia to put more and more pressure on you," Zelenskyy said. 

"It is time for you to be not separate, not fragments, but one whole," he said.

Other proposals for supporting Ukraine were an agreement to provide €9 billion ($9.7 billion) in financial assistance, as well as further military aid and help with war crimes investigations.

Leaders also discussed the issue of food security with proposals on how to help Ukraine export its masses of agricultural products. The Russian invasion triggered a global food crisis by choking Ukraine's exports through the Black Sea. Ukraine is one of the world's biggest exporters of staple goods such as wheat and vegetable oil.

EU in deadlock with Hungary over oil embargo

wmr, ab/msh (AP, Reuters)