At a summit focused on aiding Ukraine with a long-delayed package of extra financial support, European Union leaders agreed Monday to impose an embargo on most Russian oil imports into the EU by the end of the year as part of new penalties on Moscow.
The embargo applies to Russian oil imported by sea, with a temporary exemption for pipeline imports. It is a measure that was critical in bringing landlocked Hungary on board a decision that required agreement.
According to EU Council President Charles Michel, the agreement covers more than two-thirds of Russia’s oil imports. The EU’s executive branch chief, Ursula Von der Leyen, said the sanctions will “effectively cut around 90% of oil imports from Russia to the EU by the end of the year.”
Leaders also decided to grant Ukraine with a 9 billion euro ($9.7 billion) tranche of funding. It is to help the war-torn country’s economy, according to Michel. It was unclear if the funds would be distributed in the form of grants or loans.
“As she rightly said yesterday, Russia will find other importers,” Russia’s permanent envoy to international organizations in Vienna, Mikhail Ulyanov, said on Twitter in response to the EU’s decision.
Russia’s war machine
Individuals will face asset freezes and travel bans as part of the additional penalties. Russia’s largest bank, Sberbank, will receive a ban from SWIFT. It is the main global financial messaging system from which the EU previously barred several smaller Russian banks. The distribution of three major Russian state-owned broadcasters’ programs in the EU will be prohibited.
“We want to stop Russia’s war machine,” Michel said, lauding what he called a “remarkable achievement.”
“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,” he adds.
Michel stated that the additional penalties, which require the approval of all 27 member countries, will be approved legally by Wednesday.
Concerns
The EU has previously imposed five rounds of sanctions on Russia as a result of the conflict. More than 1,000 persons have been singled out. It includes Russian President Vladimir Putin, top government officials, pro-Kremlin oligarchs, banks, the coal industry, and others.
However, concerns over oil supply delayed the implementation of the sixth package of restrictions. It was announced on May 4.
The bloc was obliged to scale back its hopes to break Hungary’s resistance as a result of the standoff. The initial goal of the program, as suggested by European Commission President Ursula von der Leyen, was to phase out crude oil imports within six months and refine products by the end of the year.
Michel and von der Leyen both stated that leaders will return to the matter soon. Thus, hoping to ensure that Russia’s pipeline oil supplies to the EU are going at a later date.
Hungarian Prime Minister Viktor Orban has stated that he will accept the additional sanctions only if the security of Hungary’s oil supply ensures. Hungary imports more than 60% of its oil from Russia, relying on petroleum delivered via the Soviet-era Druzhba pipeline.
Russia forced to “start seeking peace”
Von der Leyen had downplayed the possibilities of a summit breakthrough. However, after Ukrainian President Volodymyr Zelenskyy pushed them to halt “internal arguments that only prompt Russia to put more and more pressure on the whole of Europe”, the leaders reached an agreement.
The EU imports around 40% of its natural gas and 25% of its oil from Russia. The disagreements over the subject have exposed the limits of the EU’s goals.
In a 10-minute video message, Zelenskyy urged leaders to put an end to “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, Zelenskyy said, will Russia forcefully “start seeking peace.”
He had previously proposed that the EU target Russia’s lucrative energy sector, depriving Moscow of billions of dollars in daily supply payments.
Hungary
However, Hungary was among a group of EU members concerned about the economic impact of the oil embargo. It included Slovakia, the Czech Republic, and Bulgaria. Hungary is largely reliant on Russian energy and cannot afford to shut down the pipelines. Hungary imports 85 percent of its natural gas from Russia, in addition to its requirement for Russian oil.
When Orban arrived in Brussels for the conference, he was adamant that no deal was in the works. Thereby, stating that Hungary’s energy supply should have a guarantee.
According to Von der Leyen and Michel, Germany and Poland’s commitment to phase out Russian oil by the end of the year and forego oil from the northern half of the Druzhba pipeline will help cut Russian oil imports by 90%.
The leaders will discuss food security on Tuesday. The leaders are urging their countries to expedite work on “solidarity lanes” to help Ukraine export grain and other goods.