EU oil ban adds pressure on Russia, but hurdles remain: analysts | Russo-Ukrainian War
The European Union proposes for the first time a complete oil embargo against Russia, while Moscow continues its war against Ukraine.
The bloc hopes Europe will stop importing Russian oil by the end of the year. However, questions remain.
European Commission President Ursula von der Leyen has announced details of a planned sixth sanctions package against Russia on May 4, which includes the bold oil move.
As soon as the proposal was announced, Hungary and Slovakia expressed strong reservations.
Hungarian Prime Minister Viktor Orban said the move would devastate his country’s economy and suggested Russian pipeline shipments should be exempted from a ban that could only apply to sea deliveries.
Hungary and Slovakia received between 75 and 100 percent of their oil imports from Russia last year.
Now the Commission wants all EU members to stop all imports of Russian crude oil within six months and import only refined products such as petrol, diesel or kerosene into the European Union until ‘at the end of the year.
Additionally, the EU is seeking to ban shipping and insurance companies from dealing with Russian oil.
“The move is intended to take advantage of Russia’s heavy reliance on Western insurers and shippers and deter third countries from refueling,” Maria Shagina, visiting senior researcher at the Center, told Al Jazeera. on US Politics and Power and the Finnish Institute of International Affairs.
“The absence of a European energy embargo is currently the main weakness of the Western sanctions regime.”
So far, most of the EU sanctions against Russia stem from EU Council decisions and regulations and essentially consist of changes to the measures imposed on Russia after the annexation of Crimea in 2014.
Since the start of the current war in February, the Council of the EU has continuously amended these decisions and the accompanying regulations, which are enforceable under EU law.
For von der Leyen’s ‘comprehensive ban’ on Russian oil to be implemented, all 27 member states must vote unanimously on a set of conditions, further modify previous decisions and allow the Commission to serve as the main regulatory enforcer.
“This is a very powerful tool at the EU’s disposal, but it requires the unanimous consent of all member states. The ban would become part of the EU’s common foreign and security policy, its main foreign policy arm,” William T Daniel, assistant professor of comparative politics at the University of Nottingham, told Al Jazeera.
“Unlike other areas where the EU has complete autonomy to act, foreign policy is always left to the collective agreement of member states. If the EU fails to find a way to get all 27 members to agree on a unified set of conditions, it will not be able to act fully in this area,” Daniel added.
Besides Hungary, Slovakia and the Czech Republic, Croatia is also considering a derogation. Bulgaria also has reservations.
“More than 90% of Slovakia’s oil imports come from Russia, mainly through the Druzhba pipeline. Slovakia is also a landlocked country and importing oil by sea would be a very cumbersome process that would cost a lot more than importing Russian oil through a pipeline,” Hari Seshasayee, a global research fellow at the Wilson Center, told Al Jazeera. .
“Any EU-wide ban will lead to further disruption in oil prices and also shortages across Europe, especially in countries that depend on Russian oil for more than half of their total imports.”
Currently, such a list includes eight countries – the Czech Republic; Bulgaria; Poland; Lithuania; Hungary; Finland; Latvia and Slovakia.
“European countries will end up paying a lot more to replace Russian oil with alternative sources,” Seshasayee said.
This is one of the reasons why Europe’s de facto leader, Germany, resisted an oil embargo for months.
However, after a recent meeting of EU energy ministers, German Economy Minister Robert Habeck said that Berlin was ready to ban imports, even if this decision would not go beyond Germany ” Without leaving a trace”.
“The policy shifts of individual member states – especially Germany – are massive and should not be underestimated. Yet all of this takes time to materialize. And the longer it takes the EU to reorient its policy towards an effective ban on Russian oil, the longer the Russian economy will benefit from the sale of oil to Europe,” Daniel said.
Oil remains Russia’s most important export product, and the EU is therefore under intense public pressure to end or at least drastically reduce its dependence.
Since the start of the war in Ukraine, member state payments for Russian oil have totaled more than 20 billion euros ($21 billion), and with the loss of Russian quantities in an already tight oil market and in Against a backdrop of rising oil prices, Moscow could end up generating more revenue, regardless of a ban.
“I think Russia’s total oil production will probably decline by up to three million barrels a day over the next two months, or even more. Still, that doesn’t mean their losses are equivalent to the reduction in supply,” Seshasayee said.
“Any kind of EU-wide ban will make Russia even more desperate to sell to any country that can still afford to buy Russian oil – especially those in Asia, like China. and India,” he added.
The EU move has also raised the question of why Europe is not trying to impose pressure via a gas ban.
The level of dependence on gas is even greater, given that around 40% or more of European gas imports in 2021 came from Russia.
“In fact, some European countries started importing even more gas from Russia in the aftermath of the war in Ukraine, in anticipation of rising gas prices and possible import restrictions from Russia,” Seshasayee said. .
Besides the economic effects, can an oil ban prevent the killing of innocent civilians?
Everything will depend on how quickly Europe finds the unity to enact the ban.
“The EU-imposed oil ban will be a significant escalation in sanctions pressure. Given the design of the ban, the impact will be felt next year. In the short term, the main impact will come from self-sanction. In the medium to long term, there will be an energy decoupling between the EU and Russia,” Shagina said.
Nonetheless, there appears to be a consensus among experts interviewed by Al Jazeera for this article that the EU-imposed oil ban is necessary to end Europe’s energy dependence on of Russia, but also to harm Russia’s finances in a way that makes a prolonged war impossible.
The next meeting of EU foreign ministers is scheduled for Monday, where the issue will come back to the fore.