Ursula von der Leyen, the president of the European Fee, has at the moment unveiled a proposal to impose an EU-wide ban on Russian oil imports, one in every of Moscow’s most important sources of income.

The embargo might be structured and gradual, giving member states as much as six months to section out purchases of Russian crude and till the top of the yr to cease shopping for all kinds of refined oil merchandise.

The ban will apply to all Russian oil traded each by way of ports and pipelines.

“Allow us to be clear: it won’t be straightforward. Some member states are strongly depending on Russian oil. However we merely need to work on it,” mentioned von der Leyen whereas talking earlier than the European Parliament on Wednesday morning.

“We maximise stress on Russia, whereas on the similar time minimising collateral harm to us and our companions across the globe. As a result of to assist Ukraine, our personal economic system has to stay robust.”

A part of the sixth bundle of EU sanctions, the oil embargo represents probably the most impactful penalty the bloc has imposed on Russia for the reason that begin of the Ukraine conflict on 24 February and has the potential to deprive the Kremlin of one in every of its most dependable sources of earnings.

The unconventional measure threatens to additional destabilise the entire European economic system, which has already entered a interval of deceleration and record-breaking inflation because of the battle.

The European Union is Russia’s prime oil consumer, shopping for round 3.5 million barrels of crude and refined merchandise every day. Final yr, the bloc spent greater than €73 billion on Russian oil, the best expenditure on fossil fuels by a big margin.

Von der Leyen’s announcement follows days of intense behind-the-scenes diplomacy between the chief and representatives of member states, a few of whom stay uneasy concerning the backlash the measure is anticipated to set off in opposition to the European economic system.

Given how inter-linked oil markets are world wide, the transfer from Brussels may simply have spill-over results past the continent, hitting middle- and low-income international locations alongside the best way.

The embargo might be additional mentioned by ambassadors over the approaching days and can enter into drive solely after its unanimous approval and publication within the EU’s official journal.

Germany has been a key issue behind the decision-making course of: the nation just lately lifted its opposition after managing to slash its dependency on Russian oil from 35% earlier than the conflict to 12% in Could.

“After two months of labor, I can say Germany is just not in opposition to an oil ban on Russia. After all, it’s a heavy load to bear, however we’re prepared,” Robert Habeck, Germany’s vice-chancellor and economic system minister, instructed reporters on Monday.

“We have now to arrange the hubs, we have now to arrange the pipelines,” he mentioned. “So, time is useful, however different international locations have greater issues.”

Germany is without doubt one of the international locations linked to the Druzhba pipeline, an enormous conduit operated by Russia’s state-controlled big Transneft, that additionally connects Poland, Hungary, Slovakia, the Czech Republic and Austria.

Throughout consultations, Hungary and Slovakia raised considerations concerning the ban’s unfavorable penalties for his or her nationwide economies, in keeping with diplomatic sources consulted by Euronews. The 2 international locations, that are extremely depending on Russian pipeline oil, have pushed to be granted an additional yr to finish the phase-out.

However the particular remedy would not seem like sufficient for the Hungarian authorities, which had mentioned additional sanctions on fossil fuels have been a “crimson line.”

“We don’t see any plans or ensures on how a transition may very well be managed primarily based on the present proposals, and the way Hungary’s vitality safety could be assured,” wrote Zoltán Kovács, the Hungarian authorities’s worldwide spokesperson, on a tweet reacting to the information.

Italy, Greece and Austria careworn the necessity to have enough time to adapt their vitality provide chains, whereas Greece, Malta, Cyprus, Belgium and the Netherlands identified potential financial losses for his or her native delivery industries, Euronews understands.

On the opposite facet of the desk, Poland insisted on slapping a full embargo on each oil and gasoline imports, a twin situation that may in all chance set off a deep recession throughout the continent.

“We’re depriving the Russian economic system of its skill to diversify and modernise. Putin wished to wipe Ukraine from the map. He’ll clearly not succeed,” von der Leyen mentioned.

“Quite the opposite: Ukraine has risen up in unity. And it’s his personal nation, Russia, he’s sinking.”

All eyes on suppliers

The protracted timeline envisioned by the Fee — nearly 9 months earlier than the full ban takes place — is designed to permit member states to seek out new suppliers. The earlier sanction in opposition to Russian fossil fuels, the coal ban, launched a deadline of simply 4 months.

All eyes flip now to different oil-producing international locations, together with Iraq, Nigeria, Saudi Arabia, Kazakhstan, Norway, the US and the UK, who might be anticipated to fill the massive hole left by Russia.

The Group of the Petroleum Exporting Nations (OPEC), which works together with Moscow, has beforehand warned an embargo on Russian oil would create a market disruption similar to the Nineteen Seventies vitality disaster, which prompted a protracted, painful interval of stagflation within the West.

“We may doubtlessly see the lack of greater than seven million barrels per day of Russian oil and different liquids exports,” OPEC Secretary-Common Mohammad Barkindo mentioned throughout a gathering final month with EU officers. “Contemplating the present demand outlook, it could be practically not possible to exchange a loss in volumes of this magnitude.”

An analogous however much less stark warning was issued by Janet Yellen, the US Treasury Secretary, who mentioned “we should be cautious after we take into consideration a whole European ban” on Russian oil.

Yellen mentioned the measure would possibly set off a spike in worldwide costs that, in a counterproductive means, would carry more cash into Moscow’s coffers and assist cushion the affect from Western sanctions.

A gaggle of specialists at Bruegel, a Brussels-based economics assume tank, argued in a latest paper that the sudden elimination of so many oil barrels from the market will represent a “critical international provide shock.”

“With already tight oil markets, it’s not clear that suppliers would have the ability or keen to make up the shortfall,” the specialists wrote, casting doubt over OPEC’s willingness to assist Europe climate the storm.

The EU seems to be keen to bear the brunt of its choice, aware of how the continued buy of Russian fossil fuels is denting the affect of the earlier rafts of sanctions.

Though the bloc has focused nearly all conceivable sectors of the Russian economic system, from the Central Financial institution to microchips and vodka, the aggression reveals no indicators of abating. 

Ukraine has for weeks been calling on the 27 to boycott Russian oil, arguing the taxes the federal government receives from the exports are financing the army marketing campaign.

“Oil is so vital for us due to its direct affect on the Russian skill to proceed and improve aggression in opposition to Ukraine,” Taras Kachka, Ukraine’s commerce consultant, instructed Euronews final month.

“[An oil embargo] signifies that there might be a restricted capability to pay salaries to the Russian troopers. It will likely be not possible to supply weapons by Russian factories, logistics, and so on,” he added.

In addition to the oil embargo, President von der Leyen additionally proposed to take away Sberbank, Russia’s largest financial institution, and two different “main banks” from SWIFT, the Belgium-based system that permits monetary transactions world wide, and to ban three further Russian state-owned broadcasters.

The Fee president, who in early April travelled to Kyiv and visited the scene of the Bucha massacres, mentioned the sixth bundle of sanctions will impose journey bans and asset freezes on these concerned within the alleged conflict crimes and the “inhuman siege” of the port metropolis of Mariupol.

“This sends one other vital sign to all perpetrators of the Kremlin’s conflict: We know who you might be, and you’ll be held accountable,” von der Leyen mentioned.