EU leaders came to an agreement on 30 May to ban most imports of Russian oil, the harshest economic penalty yet imposed for Russia’s invasion of Ukraine and potentially Europe’s biggest sacrifice.
The agreed plan, which was initially proposed by the European Commission a month ago, is the EU's sixth set of sanctions following the invasion of Ukraine and will have the effect of blocking around 70% of Russian oil imports. For now, the ban will only affect oil that arrives by sea – the embargo stops short of banning pipeline oil, following opposition from three member states.
The compromise follows weeks of wrangling as EU national leaders struggled to resolve their differences over the ban, with Hungary, which imports 65% of its oil from Russia through pipelines, its main opponent. Slovakia and the Czech Republic, both landlocked, also asked for more time due to their dependence on Russian oil, and Bulgaria, already cut off from Russian gas by Gazprom, had also sought opt-outs.
The ban is part of the sixth package of sanctions approved at a summit in Brussels, which all 27 member states have had to agree on. Main points:
- Russian seaborne oil to be immediately banned, with a temporary exemption for pipeline oil. Two-thirds of Russian oil arrives by sea.
- Pledges by Poland and Germany to stop importing pipeline oil by the end of this year will raise coverage of the ban to 90% of Russian imports.
- Russia's largest bank, Sberbank, to be cut of from the Swift payment system, which allows the rapid transfer of money across borders.
- Three more Russian state-owned broadcasters banned.
- More restrictions on ‘individuals responsible for war crimes in Ukraine.’
For now the pipeline supplying oil to Hungary, Slovakia and the Czech Republic, accounting for 10% of imports is exempted, but the European Council will revisit this exemption "as soon as possible", said European Commission President Ursula von der Leyen.
European Council chief Charles Michel said that the deal would cut off "a huge source of financing" for the Russian war machine. Russia currently supplies 27% of the EU's imported oil and 40% of its gas. The EU pays Russia around €400bn a year in return. So far, no sanctions on Russian gas exports to the EU have been put in place, although plans to open a new gas pipeline from Russia to Germany have been frozen.
These sanctions will entail some sacrifices. The cost of living crisis being felt across Europe will be exacerbated. Sky-rocketing energy prices – among other things – have curtailed some EU countries' appetite for sanctions which are likely to hurt their own economies.