Europe Bans Russian Oil Export Ban Takes Effect Today: Here’s What You Need to Know..!!

Europe Bans Russian Oil Export Ban Takes Effect Today: Here’s What You Need to Know..!!

One of the EU’s latest rounds of retaliatory measures in response to Russia’s invasion of Ukraine includes an oil embargo that will be phased in overtime.

It will be a “total import ban on Russian oil, seaborne and pipeline, crude and refined,” EU Commission President Ursula von der Leyen said on Wednesday. It will take place in stages so that nations have time to identify alternate energy supplies.

The plan must have the backing of all member states in order to be adopted. All-out sanctions have been opposed by several countries in the 27-nation bloc.

It will not be easy, von der Leyen told the European Parliament in Strasbourg. “Today we are addressing our dependence on Russian oil, and let’s be clear,” he said. “We just have to do it,” she continued, “despite the fact that some member states are heavily dependent on Russian energy.”

The European Union’s envoys have failed to come to an agreement, but talks are due to restart on Thursday… An embargo on some products is being considered.

What’s in The Eu Plan?

Russian crude oil and processed products will be phased out by the end of 2022, according to the European Commission. Hungary and Slovakia might get an extension on the embargo until the end of 2023 under the plan.

Shipping, brokerage, insurance, and financing services given by European Union corporations would be banned within a month for the transfer of Russian oil worldwide, an EU source tells Reuters.

As a result of the EU’s decision to stop purchasing Russian oil, the ban would impact Russia’s capacity to find new buyers.

europe bans russian oil

Sberbank, Russia’s largest bank, and two other financial institutions would be added to the list of banks already cut off from the SWIFT messaging system, according to the EU’s chief executive.

Russians’ main source of revenue could be curtailed if an embargo is agreed upon. The United States and the United Kingdom have already implemented bans.

The plan is anticipated to be adopted by EU ambassadors as early as this week, paving the way for it to become law shortly after.

Similar to the Russian coal ban, enforced by the EU in April, the spot market was immediately affected and existing contracts had a four-month wind-down time.

In light of the looming EU oil embargo, Kremlin spokesman Dmitry Peskov said on Wednesday that Russia has been exploring numerous solutions.

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Which Eu Economies Would Be Hardest Hit by A Ban?

As of 2020, Russia will supply 26% of Europe’s oil imports from Russia. European buyers of Russian oil are Germany, Poland, and the Netherlands.

According to the Centre for Research on Energy and Clean Air, Europe has paid Russia 14 billion euros ($14.94bn) for oil since the start of what Moscow deems a special military campaign in Ukraine two months ago.

The European Commission is seeking to reduce the expense of banning Russian oil by speeding up the availability of other energy sources. If suitable and reasonably-priced alternatives aren’t found, the EU may find itself saddled with higher energy costs or a slowdown in economic growth.

europe ban russian oil

Moscow is likely to find other consumers outside Europe, notably China and India, according to Russian political analyst Andrey Ontikov who spoke to Al Jazeera. Ontikov also predicted that the EU will be forced to pay higher costs for alternative oil imports.

‘European countries are shooting themselves in the leg,” Ontikov added. “I have no idea what those countries will have to pay for oil [from elsewhere],” says the analyst. Even if crude oil is provided by the United States, what will it cost?

The first deputy head of Russia’s upper house’s international affairs committee Vladimir Dzhabarov told Russia’s RIA news agency that Europe will continue to acquire Russian oil via third nations once an embargo is put in place.

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Why Didn’t Natural Gas Make It Into the Sanctions List?

Sanctions against natural gas have not yet been implemented. Because of the EU’s reliance on it, a prospective ban has yet to be seriously explored. Moreover, 40% of the EU’s total gas consumption will come from Russia in 2021.

EU countries have worked on a single energy policy since 2006 and 2009 when certain eastern EU countries experienced gas shortages.

European Union energy imports from Russia will fall to 62 percent in 2021, down from 77 percent in 2011. However, the EU is still a long way from eliminating its dependent on Russian energy. The “elephant in the room,” as Al Jazeera’s Dominic Kane put it, was gas, according to his report from Berlin on Wednesday.

europe ban russian oil

In order to combat Russia, “European leaders want to act quickly, but they are tethered to the reality of decisions that governments across Europe took over decades when they thought that it was in their best interest to forge deals with President Putin,” he stated.

EU officials, on the other hand, are working to reduce the EU’s reliance on Russian gas. He announced his “REPowerEU” energy strategy on March 8th and detailed steps to dramatically cut Russian gas imports by the end of the year and achieve complete independence from Russian fossil fuels by the end of this decade.

The Druzhba pipeline, which supplies virtually all of Slovakia’s imported oil, was built in the Soviet era, and the country has joined Hungary in requesting an exception from the embargo.

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Who Are the Countries that Have Voiced Their Opposition to This Plan?

In a statement, Hungary said it could not support the embargo because it would jeopardize the country’s ability to obtain energy.

Peter Szijjarto, Hungary’s foreign minister, claimed in a Facebook video that “the Brussels package of penalties will block oil supplies to Europe, with a relatively short notice, in case of Hungary the end of next year.”

The Hungarian minister stressed that only if Russia’s crude oil shipments via pipeline were spared from sanctions would Hungary agree to these measures.