EU member states are at loggerheads over demands for an immediate blockade on Russian oil imports as the soaring cost of living weighs heavily on politicians considering how to punish Moscow over its war in Ukraine.
Momentum is growing in the EU for fresh curbs on Russian fossil fuels as evidence mounts of atrocities against Ukrainian civilians. But while the European Commission is working on oil sanctions, there is scepticism about the idea of a rapid clampdown among some member states.
Viktor Orban’s government in Hungary, which has cultivated strong ties with President Vladimir Putin’s regime, has said measures targeting Russia’s lucrative oil and gas exports were a “red line”. This is an effective veto on a measure that requires unanimity among the 27 member states.
It is not alone in being cautious about the idea of an immediate blockade. Politicians are wary of exacerbating the surge in energy prices, which were up 45 per cent in March from a year earlier in the Eurozone.
Olaf Scholz, German chancellor, said last week that his country was working actively to wean itself from Russian oil this year. One German official said that in theory Berlin could implement a Russian oil embargo, but probably only by the end of this year or the beginning of 2023.
German officials say a ban on seaborne Russian oil would be relatively easy for the EU to implement, but Germany would struggle to find a substitute for the Russian oil that arrives in the country via pipeline.
Ursula von der Leyen, European commission president, has pledged to work on oil sanctions, while Josep Borrell, the EU’s chief diplomat, said of a crude embargo: “Sooner or later . . . it will happen.” Jake Sullivan, US national security adviser, told ABC television on Sunday that President Joe Biden was “working on a daily basis with his European colleagues on steps Europe can take to wean itself off of Russian oil and gas.”
Commission officials have prepared the rough outline of possible measures targeting Russian oil, as part of a basket of potential restrictions drawn up ahead of the invasion of Ukraine.
But a lack of unanimous support for the measure means it is not on the official agenda of topics to be discussed at an EU foreign ministers meeting on Monday. It will only be raised informally for broad discussion.
A senior EU official admitted this was because of resistance from unnamed member states, adding that cutting off Russian oil was “a technically and politically complicated matter” for some countries with high dependency.
Among the questions over any oil embargo is exactly which Russian oil products are affected, how long any phase-in period will last, and whether it is a full or partial ban. The question also remains of an accompanying release of European strategic oil reserves to offset some of the impact.
Officials have raised ideas such as imposing tariffs on Russian oil, rather than a straight ban as was imposed on coal.
The EU relies on Russia for around 25 per cent of its oil imports, with some member states’ dependency far higher. The bloc has collectively paid Russia more than €35bn since the invasion of Ukraine began for energy supplies, compared with €1.5bn pledged to Ukraine for military equipment, Borrell said last week.
Orban has been accused by Ukraine’s president Volodymyr Zelensky of being too unwilling to oppose Moscow. Zelensky used a speech last month to tell Orban he should “decide who you are with”.
Asked about an EU oil ban, Zoltan Kovacs, a Hungarian government spokesman, said there had “never been such a proposal so there was nothing to block.”
The push from Von der Leyen, Borrell and member states including Poland and the Baltic countries to move against Russian crude follows a sanctions package last week that targeted exports of coal and other goods, as well as Russian banks, oligarchs and senior officials.
“We’re not done with sanctions yet, especially since Russia is not giving any indication of slowing down the war effort,” said an EU diplomat. “These horrible pictures of atrocities make . . . sanctions proposals more easy to achieve consensus on.”
Additional reporting by Stefania Palma in Washington and Marton Dunai in Budapest