EU to ease sanctions on Russian agricultural products, oil to Europe

The European Union (EU) has decided to ease sanctions on Russian companies that trade in agricultural products and the transport of oil to third countries, according to a statement released by the EU Council on Thursday (July 21).

The council said: “With a view to avoid any potential negative consequences for food and energy security around the world, the EU decided to extend the exemption from the prohibition to engage in transactions with certain state-owned entities as regards transactions for agricultural products and the transport of oil to third countries.”

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This means that Rosneft, Gazprom Neft, Sovcomflot and other Russian state-owned companies will now be able to conclude deals with Europe on transport of oil to third countries.

Ban on transactions

The EU had in March put a ban on transactions between European companies and Russian corporations but some transactions were initially allowed as exceptions.

However, the EU as part of the sixth sanction package introduced in June, imposed a partial embargo on Russian oil. Sea shipments of oil to the EU were banned and European companies were prohibited from insuring and reinsuring shipments of Russian oil and oil products to countries outside the European Union.

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As a result, Vitol, Glencore, Trafigura, Shell and Total, some major European energy players, stopped trading Russian oil. These companies will now be able to resume business with Russia.