The partial EU embargo covers Russian oil brought into the bloc by sea, with exemptions granted to imports transported by pipeline after Hungary protested.
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Moscow pledges to find other oil importers as soon as the world’s largest trading bloc agreed imposed a partial embargo on Russian crude oil.
The European Union on Monday agreed to ban most Russian oil imports by the end of the year as part of new measures aimed at punishing the Kremlin for its gratuitous invasion of Ukraine.
The move was hailed by EU foreign policy chief Josep Borrell as a “paralyzing landmark decision”. [Russian President Vladimir] Putin’s war machine. “
It includes Russian oil brought into the bloc by sea, with exemptions granted to imports transported by pipeline following objections from Hungary.
The EU’s long-delayed sixth package of sanctions against Russia requires the approval of all 27 member states.
Reacting to these measures, Mikhail Ulyanov, Russia’s permanent representative to international organizations in Vienna, Austria, said the oil ban reflects negatively on the bloc.
“As she rightly said yesterday, #Russia will find other importers,” Ulyanov said via Twitter, referring specifically to European Commission President Ursula von der Leyen.
“It’s remarkable that she now contradicts her own statement yesterday. The change of mind very quickly shows that the #EU is not in a good shape,” he added.
EU’s von der Leyen welcomed the bloc’s agreement on oil sanctions against Russia. She said the policy would cut about 90% of oil imports from Russia into the bloc by the end of the year and soon return to the problem of the remaining 10% of pipeline oil.
About 36% of EU oil imports come from Russia, a country that plays an important role in the global oil market.
To be sure, Russia is the world’s third largest oil producerbehind the US and Saudi Arabia, and is the world’s largest crude oil exporter to the global market. It is also a major producer and exporter of natural gas.
Ukrainian officials have repeatedly asserted that the EU imposes a comprehensive embargo on Russian oil and gas, with energy importing countries continuing to pay Putin war reparations on a daily basis.
‘The best achievable’
Oil prices rose after this news.
International standard Brent Crude oil futures rose 1.3% to $123.29 a barrel in early morning trades in London, while in the US West Texas Intermediate futures contracts rose 3% to $118.61.
European Council President Charles Michel said the compromise on oil sanctions reaffirmed the bloc’s unity in the face of the Kremlin’s onslaught. The failure to secure any sort of deal may have been heralded as a victory for Putin, it is thought.
Adi Imsirovic, a senior research fellow at Oxford’s Institute for Energy Studies, told CNBC’s “Squawk Box Europe” on Tuesday: “I think it’s the best it can be.”
Imsirovic said the EU decision paves the way for the bloc, along with the US, to put pressure on other energy importing countries, such as India, to impose similar measures on Russian oil.
“Previously this was not possible because it was very difficult to ask India to drop their imports if Europe itself didn’t do it. So I think this is very important from a political point of view.” he added.
India has rejected criticism of it continuing to buy energy from Russia after the Kremlin’s war in Ukraine.
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India, the world’s third-largest oil importer, has seen its oil imports from Russia steadily increase since Russia invaded Ukraine in late February. according to Reuterscited data by Refinitiv Eikon.
Asia’s third-largest economy has dismissed criticism of it continuing to buy Russian energy after the Kremlin’s war in Ukraine, arguing that a abrupt halt to Russian oil imports will eventually harm consumers.
Separately, China is said to be quietly increasing its oil purchases from Russia at a discount, Reuters reported, citing shipping data and unnamed oil traders. It appears to show that the world’s largest oil importer is trying to fill the void left by Western customers when it cuts ties with Russia because of the humanitarian crisis in Ukraine.
What else has been suggested?
Along with EU oil sanctions, the bloc agreed on measures to cut Russia’s largest bank, Sberbank, from the SWIFT messaging system and ban three more state-owned television stations.
There is also a ban on insurance and reinsurance of Russian ships by EU companies, said the EU’s von der Leyen.
“The other point that I think that hasn’t been mentioned much, I think this package will almost certainly include the shipping insurance ban. I haven’t detailed that yet but will almost certainly be included. “, said Imsirovic.
He estimates that about 95% of shipping insurance for Russian oil is carried out in Europe, mainly in London. “So that will really not only affect Russian exports to Europe now, it will affect Russian exports everywhere else.”
The previous five rounds of measures included restricting access to capital markets, freezing the assets of Russia’s central bank, excluding Russian financial institutions from SWIFT, and banning imports of Russian coal and other commodities.
