The European Union is set to begin tentative discussions this week about a potential embargo on oil imports from Russia, but any decision is still weeks away, given the deep division on the issue among member states.
Since the Russian war in Ukraine started at the end of February, Europe has been hesitant to slap embargoes on Russian energy, fearing recession for its economies and record-high energy prices for its consumers because of its high dependence on Russian oil and gas.
Following the footage of atrocities of Russian troops in Ukraine, the EU adopted a ban on imports of Russian coal last week. The embargo, however, will not go into effect until August 2022. The delayed embargo will give EU member states time to find enough alternative supplies.
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For Russian oil and especially gas, a decision on an embargo would be even more difficult, as the EU continues to be split on a ban. The Baltic states and Poland are calling for an oil embargo, while the biggest economy, Germany, continues to oppose a ban on oil imports, saying that it's impossible to replace Russian supplies immediately, and a halt in imports would hurt its economy too much.
Overall, the EU relied on Russia for 26 percent of its crude oil imports, which met 37 percent of the EU energy needs in 2020, according to the EU's statistics office Eurostat. In natural gas, the dependence is even higher—in 2020, the EU received 46 percent of its natural gas imports from Russia, per Eurostat data.
The mounting evidence of Russian war crimes while troops retreat from Ukrainian towns has prompted strong condemnation globally and a resolve in several EU member states to stop using Russian energy. Many within the EU have called for an oil embargo to follow the coal import ban, but several nations—led by Germany—continue to resist the idea of an oil import ban.
So, discussions over a possible oil embargo on Russia would likely take weeks. Even if a ban is introduced, it could be a phased-in embargo to allow Europe to find alternatives to Russian oil supply, as The Wall Street Journal's Laurence Norman notes.
Top EU officials have called for an EU action on Russian oil to deprive Russia of revenues that it could use in the war in Ukraine.
Announcing the proposal to ban Russian coal—which the EU agreed to on Friday—European Commission President Ursula von der Leyen said in a speech last week:
"Yes, we have now banned coal. But now, we have to look into oil and we will have to look into the revenues that Russia gets from the fossil fuels. And we really have to make an effort, for example to take a share to an escrow account, so that we will really limit the source of revenues of Russia from fossil fuels. This has to end, and this is the next step we will have to take together."
Josep Borrell, High Representative of the EU for Foreign Affairs and Security Policy, said this weekend after meeting with Ukrainian President Volodymyr Zelenskyy in Kyiv:
"We need to continue to increase our pressure on Russia. We have imposed massive sanctions already but more needs to be done on the energy sector, including oil. On Monday, I am convening an EU Foreign Affairs Council #FAC to discuss next steps."
Borrell, the EU's top diplomat, told the European Parliament last week that the bloc had spent much more money on buying energy from Russia than on helping Ukraine resist the invasion.
"We've given Ukraine nearly €1 billion. That might seem like a lot but €1 billion is what we're paying [Vladimir] Putin every day for the energy he provides us with. Since the start of the war, we've given him €35 billion, compared to the €1 billion we've given Ukraine to arm itself," Borrell said.
Still, Germany, Hungary, and Austria, as well as some other EU members, continue to resist an immediate outright ban on Russian oil, although Germany signaled last week it could end its dependence on Russian oil this year.
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A former aide to Putin, Andrei Illarionov, told the BBC over the weekend that a full embargo on Russian oil could stop Putin's war.
"It's one of the very effective instruments still in the possession of the Western countries," Illarionov told the BBC.
The EU now must decide if it could take the economic pain to inflict pain on Putin's revenues with an oil embargo.
By Tsvetana Paraskova for Oilprice.com
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The EU is dependent on Russian gas supplies for 40%-46% of its needs and 30% of its oil needs with Germany, the EU’s biggest economy, depending on Russian oil and gas for 65% of its needs.
Moreover Russian oil and gas supplies are replaceable now or ever.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London