The European Union’s (EU) long resistance to ban oil imports from Russia was broken on Wednesday (May 4) with the EU chief executive officer suggesting a phased oil embargo on Kremlin amidst its misadventure in Ukraine.
On April 8, the European Union nations had agreed to ban Russian coal, but it had then underlined the 27 countries’ inability to agree so far on a much more sweeping embargo on oil and natural gas that would hit Russia harder but risk recession at home.
But the coal import ban wasn’t considered significant because coal forms only 3.5% of Russia’s exports and only a quarter goes to the EU.
The EU countries are yet to have a consensus on oil ban, but if it happens then that could very well prove to be the biggest and most significant sanctions against Russia since February 24 when Putin’s forces attacked Ukraine. The EU pays Russia $20 million a day for coal — but $850 million a day for oil and gas. So, an oil ban will have a greater impact on Russian finances.
The coal ban would cost Russia 4 billion euros ($4.4 billion) a year, the EU’s executive commission said. Energy analysts and coal importers say Europe could replace Russian supply in a few months from other countries, including the U.S. But compared with natural gas and oil, coal is by far the easiest to cut off quickly and inflicts far less damage on Russian President Vladimir Putin’s war chest and the European economy.
“Today, we will propose to ban all Russian oil from Europe,” European Commission President Ursula von der Leyen told the European Parliament in Strasbourg on Wednesday.
“This will be a complete import ban on all Russia,” she said as the Parliament members applauded the proposal.
As per the proposal, the EU members would phase out supplies of Russian crude oil within six months and refined products by the end of 2022, von der Leyen said, adding, care will be taken to minimise the impact on European economies.
EU countries, especially big economies like Italy and Germany, rely heavily on Russian natural gas to heat and cool homes, generate electricity and keep industry churning.