Europe talks about joining Russian oil embargo

At a series of meetings starting Monday, EU leaders will discuss whether to dump by far the largest oil supplier to the region, as they have already committed to cut Russia’s natural gas use by 66% this year.

“We need to discuss how we can support Ukraine even further, politically, economically, with humanitarian aid, in terms of security, everything is on the table. So we can make sure that we will do what we can to stop Putin and his aggression against Ukraine, Danish Foreign Minister Jeppe Kofod told reporters. “It’s important with economic sanctions to continue on that track.”

Russia is the world’s second largest exporter of oil, after Saudi Arabia, and despite the chilling effect of unprecedented Western financial sanctions and an embargo imposed by the United States and the United Kingdom continue to earn hundreds of millions of dollars a day from energy exports.

“I think it is inevitable to talk about the energy sector. And we can certainly talk about oil, because it is the biggest revenue for the Russian budget,” said Lithuanian Foreign Minister Gabrielius Landsbergis when he arrived in Brussels for meeting with its EU counterparts.

Other EU countries support the idea of ​​sanctioning Russia’s most valuable asset.

“When we look at the magnitude of the destruction in Ukraine right now, I think it’s very hard to argue that we shouldn’t get into the energy sector, especially oil and coal, in terms of interrupting the normal trade in that sector.” Irish Foreign Secretary Simon Coveney said.

The European Union currently depends on Russia for about 40% of its natural gas. Russia also supplies about 27% of its oil imports and 46% of its coal imports.

What will Germany do?

Earlier this month, EU leaders said the bloc could not yet join the United States in banning Russian oil because of the impact it would have on households and industries already struggling with record high prices. Instead, they said they would work towards a 2027 deadline for ending the bloc’s reliance on Russian energy.

There is also a risk that Russia could retaliate by restricting natural gas exports. Deputy Prime Minister Alexander Novak said this month that Moscow could cut off gas supplies to Germany via the Nord Stream 1 pipeline in retaliation. before Berlin blocks the new Nord Stream 2 pipeline project.

Yet political opinion in Europe may harden as Russia ramps up its attacks on Ukrainian cities, killing hundreds of civilians and forcing millions to flee their homes.

Much will come down to countries like Germany, Russia’s largest energy customer in Europe, but also other countries that buy a lot of its gas, such as Hungary and Italy.

German Foreign Minister Annalena Baerbock said the country was “working at full speed” to end its dependence on Russia, but like some other EU countries, it couldn’t stop overnight. buying Russian oil.

“If we could, we would do it automatically,” she said, according to Reuters.

Even without an EU embargo – and a possible Russian counterpart – the world is facing its biggest energy supply shock in decades, according to the International Energy Agency. It said last week that Russia could be forced to cut crude oil production by 30% from next month due to falling demand.

Canada, the United States, the United Kingdom and Australia have already banned imports of Russian oil, which affects about 13% of Russian exports. And moves by major oil companies and global banks to stop doing business with Moscow after the invasion are forcing Russia to offer its crude oil at a huge discount.

The Paris-based IEA, which oversees the energy supplies of the world’s leading developed economies, said Russian production could fall by 3 million barrels a day.

“The implications of a possible loss of Russian oil exports to global markets cannot be underestimated,” the IEA said in its monthly report.

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