20th March 2023
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EU leaders agree to ban 90% of Russian oil imports by end of year

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EU leaders have agreed to ban most Russian oil imports into the bloc by the end of 2022 as part of a sixth round of sanctions on Moscow for the on-going war in Ukraine.

The embargo covers Russian oil brought in by sea, allowing a temporary exemption for imports delivered by pipeline, a move that was crucial to bring landlocked Hungary on board for a decision that required a 27-nation consensus.

EU Council President Charles Michel said that the agreement covers more than two-thirds of oil imports from Russia.

Ursula Von der Leyen, the president of the EU Commission, said the punitive move will ‘effectively cut around 90% of oil imports from Russia to the EU by the end of the year’.

‘This is an important step forward,’ she said, adding that, ‘we will soon return to the issue of the remaining 10% of pipeline oil.’

Michel said leaders also agreed to provide Ukraine with a nine billion euro tranche of assistance to support the war-torn country’s economy. It was unclear whether the money would come in grants or loans.

Mikhail Ulyanov, Russia’s permanent representative to international organisations in Vienna, responded to the EU’s decision on Twitter, saying: ‘As she rightly said yesterday, Russia will find other importers.’

The new package of sanctions will also include an asset freeze and travel ban on individuals, while Russia’s biggest bank, Sberbank, will be excluded from SWIFT, the major global system for financial transfers from which the EU previously banned several smaller Russian banks. Three big Russian state-owned broadcasters will be prevented from distributing their content in the EU.

‘We want to stop Russia’s war machine,’ Michel said. ‘More than ever it’s important to show that we are able to be strong, that we are able to be firm, that we are able to be tough.’

The EU had already imposed five previous rounds of sanctions on Russia over its war. It has targeted more than 1,000 people individually, including Russian President Vladimir Putin and top government officials as well as pro-Kremlin oligarchs, banks, the coal sector and more.

But the sixth package of measures announced 4 May had been held up by concerns over oil supplies.

The impasse embarrassed the bloc, which was forced to scale down its ambitions to break Hungary’s resistance. When von der Leyen proposed the package, the initial aim was to phase out imports of crude oil within six months and refined products by the end of the year.

Both Michel and von der Leyen said leaders will soon return to the issue, seeking to guarantee that Russia’s pipeline oil exports to the EU are banned at a later date.

Hungarian Prime minister Viktor Orban had made clear he could support the new sanctions only if his country’s oil supply security was guaranteed. Hungary gets more than 60% of its oil from Russia and depends on crude that comes through the Soviet-era Druzhba pipeline.

The EU gets about 40% of its natural gas and 25% of its oil from Russia, and divisions over the issue exposed the limits of the bloc’s ambitions.

In a 10-minute video address at the summit, Ukraine President Volodymyr Zelensky told leaders to end ‘internal arguments that only prompt Russia to put more and more pressure on the whole of Europe’.

He said the sanctions package must ‘be agreed on, it needs to be effective, including (on) oil’, so that Moscow ‘feels the price for what it is doing against Ukraine’ and the rest of Europe. Only then, Zelensky said, will Russia be forced to ‘start seeking peace’.

But Hungary led a group of EU countries worried over the impact of the oil ban on their economy, including Slovakia, the Czech Republic and Bulgaria. Hungary relies heavily on Russia for energy and can’t afford to turn off the pumps. In addition to its need for Russian oil, Hungary gets 85% of its natural gas from Russia.

Von der Leyen and Michel said the commitment by Germany and Poland to phase out Russian oil by the end of the year and to forgo oil from the northern part of the Druzhba pipeline will help cut 90% of Russian oil imports.

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