Filenews 31 May 2022
An agreement has been reached to impose an embargo on Russian oil, European Council President Charles Michel announced via Twitter.
"Agreement to ban the export of Russian oil to the EU. It immediately covers more than two-thirds of ( European) oil imports from Russia, cutting off a huge source of funding for its war machine. Maximum pressure on Russia to end the war," Mr Michel said.
He added that "the sanctions package includes (and) other harsh measures: The removal from SWIFT of the largest Russian bank Sberbank, the banning of another 3 Russian state broadcasters and the imposition of sanctions on persons responsible for war crimes in Ukraine."
Von der Leyen welcomed the agreement reached
The President of the European Commission, Ursula von der Leyen, welcomed the agreement reached at the EU Summit to impose an embargo on Russia's oil due to the war in Ukraine, stressing that this decision will reduce by about 90% the amount of European imports of Russian crude during the year.
THE EU will cut oil imports from Russia by 90% in 2022
Based on the decision of the 27, it is expected to cut by 90% the import of oil from Russia into Europe in 2022, a European official said.
These are two thirds of the quantities of Russian oil imported into the European market by sea, while the remaining percentage will come from the closure of the northern part of the Druzba pipeline and commitments by Germany and Poland.
The same European official clarified that the remaining sixth package of sanctions on Russia because of the war in Ukraine was also approved.
This is included in the agreement of the 27 on the embargo
The agreement of the 27 will allow temporary continuation of oil exports through Russia's land pipeline to the EU, while maritime transport will be blocked until the end of the year, Politico writes.
Germany and Poland, which could benefit from the exemption of imports through the land pipeline, have pledged to de facto close the northern Druzhba pipeline, several EU diplomats said. There is also an agreement to "complete the [closure of the] southern branch of the pipeline as soon as possible," said an Elysée official, citing Politico. The southern leg of the pipeline delivers oil to Slovakia, Hungary and the Czech Republic.
An EU official said the Czech Republic received an 18-month exemption from the ban to cover the resale of petroleum products. Hungary has also ensured that there is an emergency provision in place to ensure its security of supply in the event of interruption of deliveries from the pipeline, EU diplomats said.
The imposition of an embargo on Russian oil is one of Europe's most important steps to limit Vladimir Putin's revenues with which he finances the war machine against Ukraine. But a decision was postponed for several weeks because of objections from Hungary, which argued that its economy would be hit by a general embargo.
What Bloomberg writes about the EU agreement on the embargo on Russian oil
Writes Bloomberg in its response, giving more information about the Europeans' agreement on the embargo on Russian oil: European Union leaders have agreed to proceed with a partial ban on Russian oil, paving the way for a sixth set of sanctions against Russia and its president, Vladimir Putin, for the invasion of Ukraine.
The sanctions will ban Russia's purchase of crude oil and petroleum products delivered to member states by sea, but include a temporary exemption for crude oil from pipelines, European Council president Charles Michel said late Monday during a summit in Brussels.
Officials and diplomats still have to agree on the technical details and the sanctions must be formally approved by all 27 states. Hungary, which will continue to receive Russian oil through a pipeline, had blocked an embargo over the past month as it sought assurances that its energy supply would not be cut off. Budapest has received guarantees from EU leaders that it will be able to receive replacement supplies in the event of a flow disruption through the pipelines, according to two people with knowledge of the talks.
The European Commission has proposed to ban the transport of crude oil by sea six months after the decision, while refined petroleum products would stop in eight months, according to people familiar with the latest version of the proposal. Oil shipments via the giant Druzhba pipeline to Central Europe will be exempted until a technical solution is found that meets the energy needs of Hungary and other countries that do not have access to the sea.
The bulk of the current deliveries of the pipeline are directed to Germany and Poland, which have said that they will become independent of Russian supplies regardless of any EU action. Berlin pledged in writing to honour that commitment on Monday, a source said. If both countries follow their proposal, the overall result, along with the maritime embargo, will be a 90% cut in Russian crude oil sales to the EU by the end of the year.
Maritime supplies account for about two-thirds of Russian oil imports, and once it takes effect, the measure will cost Putin up to $10 billion a year in loss of export revenue, according to Bloomberg calculations. This is because the ban would force Russia to sell its crude at a discount in Asia, where $34 a barrel is already sold cheaper than the price of Brent futures contracts.
Orban, who accused the EU of imposing the decision on member states, told the leaders behind closed doors of the European Council that the discussion on restricting imports from the pipeline should take place at the level of EU leaders because it is a political decision and not a technical one, according to a person who knows what was said at the Summit. The next summit of EU leaders is scheduled for the end of June.
The package also proposes a ban on insurance related to the transport of oil to third countries, but will not enter into force until six months after the adoption of the measures, from the previously proposed three-month transition, the sources said. This is another retreat from the initial proposal submitted to the EU in May.
The plan to ban Russians from buying property in the EU was abandoned, according to a person with knowledge of the negotiations. Haggling over the terms of the EU's oil embargo has also led other Member States to seek and gain exemptions.
Some countries will also have a longer transitional period for banning marine oil. For Bulgaria, a transitional period is foreseen until June or December 2024, while Croatia could receive an exemption for imports of petroleum vacuum gas used to manufacture products such as petrol and butane.
Russia last year transported about 720,000 barrels of crude a day to European refineries via its main pipeline in the region. At the same time, 1.57 million people were transported by sea. barrels per day from the ports of the Baltic, Black Sea and Arctic.
Other measures in the proposed EU sanctions package include:
Remove three more Russian banks from the international payment system SWIFT, including the largest Russian bank Sberbank.
Prohibition of the possibility of providing advisory services to Russian companies and the trade in certain chemical products.
The imposition of sanctions on Alina Kabaeva, a former Olympic gymnast who is "closely linked" to Putin, according to an EU document, and on Patriarch Cyril, who heads the Russian Orthodox Church and has supported the Russian president and the war in Ukraine. Hungary, however, opposed the imposition of sanctions on Cyril, sources said.
The imposition of sanctions on dozens of military personnel, including those held responsible for the war crimes in Buka, as well as on companies that provide equipment, supplies and services to the Russian armed forces.
