The European Union is finalizing a gradual halt to its purchases of oil and petroleum products from Russia to sanction the war in Ukraine and will announce a timetable and new measures this week, several European sources said on Sunday.
• Read also: A hundred civilians evacuated from the Azovstal site in Mariupol
• Read also: Eight civilians killed in strikes in Donetsk and Kharkiv regions
• Read also: LIVE | 67th day of war in Ukraine
“There is a political will to stop buying oil from Russia and we will have measures and a decision on a phased withdrawal next week,” said a European official involved in the discussions.
The European Commission must put on the table a proposal for an embargo “with a transition period until the end of the year”, also indicated a European diplomat.
The decision is “not easy to implement” due to two difficulties, however, said the European official.
Two landlocked European countries, Hungary and Slovakia, depend on Russian pipelines. They have no ports and are not connected to any European pipeline. Infrastructure must be built or alternatives found.
In addition, European decisions must not lead to a global surge in oil prices, which would be counterproductive.
“We have to be careful with a comprehensive European ban on oil imports,” US Treasury Secretary Janet Yellen warned in April.
A price cap advocated by the United States is a “smart measure” because it avoids speculation and oil remains profitable, but “it must apply beyond Europeans and Americans”, explained European manager.
The European desire to diversify its supplies and a timetable of six to eight months to cease purchases of oil and petroleum products are all announcements intended to avoid a boom in the markets.
The European Commission held discussions over the weekend with the Member States most concerned, with the United States and with the International Energy Agency to finalize the proposal which will be submitted to the Member States.
“A new set of sanctions, which is in preparation, is absolutely essential,” said the head of EU diplomacy, Josep Borrell, on Sunday during a visit to Chile.
“We must use our economic and financial leverage to make Russia pay for what it is doing,” he added, saying the bombing of Odessa airport meant that Moscow “had the intention to deprive Ukraine of its access to the sea”.
The sanction on Russian oil must be unanimously approved by the 27 member states. “Hungary has so far always been at the rendezvous of sanctions and we must avoid giving it a pretext to block on oil”, pleaded the European official.
A first exchange is scheduled for Monday during a meeting of the Ministers of Energy of the Twenty-Seven in Brussels, but no decision is expected, because the Commission will not have yet submitted its proposals for sanctions.
The 6th package of European measures prepared by the Commission chaired by Ursula von der Leyen will put Russia’s entire oil ecosystem under sanctions. In the short term, one of the measures will aim to increase the cost of transporting Russian oil by tanker.
The largest Russian bank, Sberbank, which represents 37% of the market, must also be excluded from the Swift transaction system, several European diplomatic sources have indicated.
The EU wants to cut off its funding for the Kremlin’s war effort. Russia exports two-thirds of its oil to the EU.
In 2021, it supplied 30% of the crude and 15% of the petroleum products purchased by the EU. “The bill for Russian oil imports was four times larger than that of gas, 80 billion dollars against 20 billion,” said Josep Borrell in mid-April.
The main importers of fossil fuels from Russia (gas, crude oil, petroleum products and coal) are Germany, Italy, the Netherlands and France. The embargo on coal, decided on April 7, will come into force at the beginning of August.
Germany has announced that it has reduced its dependence on Russian oil with a drop in its imports from 35 to 12% in recent weeks, and supports the principle of a gradual embargo, indicated the Minister of Economy and Climate , Robert Habeck.