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Market News Oil market focus! Whether EU embargoes Russian oil at economic cost, results revealed this week
Oil market focus! Whether EU embargoes Russian oil at economic cost, results revealed this week
The European Union this week began tentative discussions on the Russian oil embargo, which remains divided among EU countries. Germany continues to oppose a ban on oil imports, while the Baltic states and Poland are actively calling for a ban.
2022-04-12
8555
The European Union will begin tentative discussions this week on a possible ban on oil imports from Russia, but any decision will be weeks away given how deeply divided member states are on the issue.
Europe has been hesitant to impose an energy embargo on Russia since Russia launched its war in Ukraine in late February, amid fears of a recession in Europe and European consumers facing record energy prices due to Europe's high reliance on Russian oil and gas .
The European Union last week passed a ban on imports of Russian coal after atrocities by Russian troops in Ukraine came to light. However, the embargo will not come into effect until August 2022, and the delayed embargo will give EU member states time to find sufficient alternative supplies.
For Russian oil, especially gas, it will be more difficult to decide whether to impose an embargo on Russia as the EU remains divided over the ban. The Baltic states and Poland called for an oil embargo, while Germany, the largest economy, continued to oppose a ban on oil imports , saying it was impossible to immediately replace Russian supplies and that stopping imports would hurt its economy too much.
Overall, the EU relies on Russia for 26% of its crude oil imports, which meets 37% of the EU's energy needs in 2020, according to Eurostat. When it comes to gas, the EU is more dependent on Russia. In 2020, 46% of the EU's natural gas imports came from Russia, according to Eurostat.
Mounting evidence of war crimes committed by Russian troops as they retreated from Ukrainian towns has sparked a global outcry and several EU member states are determined to stop using Russian energy. Many countries within the EU have called for an oil embargo following the coal import ban, but several countries, led by Germany, continue to resist the idea of imposing an oil import ban .
As a result, discussions about a possible oil embargo on Russia could take weeks. As The Wall Street Journal's Laurence Norman points out, even if a ban is imposed, it will likely be a phased embargo to allow Europe to find alternatives to Russian oil supplies.
Senior EU officials have called on the bloc to take action against Rosneft to deprive Russia of revenue it could use in the Ukraine war.
European Commission President Ursula von der Leyen announced the proposal to ban Russian coal in a speech last week, which the EU agreed to on Friday: “Yes, we now ban coal. But now, we have to focus on Oil , we have to focus on Russia's revenue from fossil fuels. We really have to make an effort like putting a portion of the money in escrow so we can really limit the source of Russia's revenue from fossil fuels. This is the case It has to end, and this is the next step we have to take together."
"We need to continue to increase the pressure on Russia," EU foreign affairs and security policy high representative Josep Borrell said after meeting with Ukrainian President Volodymyr Zelensky in Kiev over the weekend. More sanctions on the energy sector, including the energy sector . Next Monday, I will convene the EU Foreign Affairs Committee to discuss the next steps.”
He told the European Parliament last week that the EU is spending far more to buy energy from Russia than to help Ukraine fend off an invasion. He said: “We have given Ukraine almost 1 billion euros. It may seem like a lot, but 1 billion euros is what we pay Putin every day for the energy that we have given us. We have given him 35 billion since the war started. euros, and we only gave Ukraine 1 billion euros to arm itself.”
Still, Germany, Hungary and Austria, as well as some other EU member states, remain opposed to an immediate ban on Russian oil imports , even though Germany last week suggested it could end its reliance on Russian oil this year.
Putin's former aide Andrei Illarionov said over the weekend that a total embargo on Russian oil could stop Putin's war. "It's one of the very effective tools that the West still has," he said.
The EU must now decide whether it can inflict economic pain on Putin through the oil embargo.
Brent Crude Oil Daily Chart
GMT+8 at 13:58 on April 12, Brent crude oil was continuously quoted at $100.45 per barrel
Europe has been hesitant to impose an energy embargo on Russia since Russia launched its war in Ukraine in late February, amid fears of a recession in Europe and European consumers facing record energy prices due to Europe's high reliance on Russian oil and gas .
The European Union last week passed a ban on imports of Russian coal after atrocities by Russian troops in Ukraine came to light. However, the embargo will not come into effect until August 2022, and the delayed embargo will give EU member states time to find sufficient alternative supplies.
For Russian oil, especially gas, it will be more difficult to decide whether to impose an embargo on Russia as the EU remains divided over the ban. The Baltic states and Poland called for an oil embargo, while Germany, the largest economy, continued to oppose a ban on oil imports , saying it was impossible to immediately replace Russian supplies and that stopping imports would hurt its economy too much.
Overall, the EU relies on Russia for 26% of its crude oil imports, which meets 37% of the EU's energy needs in 2020, according to Eurostat. When it comes to gas, the EU is more dependent on Russia. In 2020, 46% of the EU's natural gas imports came from Russia, according to Eurostat.
Mounting evidence of war crimes committed by Russian troops as they retreated from Ukrainian towns has sparked a global outcry and several EU member states are determined to stop using Russian energy. Many countries within the EU have called for an oil embargo following the coal import ban, but several countries, led by Germany, continue to resist the idea of imposing an oil import ban .
As a result, discussions about a possible oil embargo on Russia could take weeks. As The Wall Street Journal's Laurence Norman points out, even if a ban is imposed, it will likely be a phased embargo to allow Europe to find alternatives to Russian oil supplies.
Senior EU officials have called on the bloc to take action against Rosneft to deprive Russia of revenue it could use in the Ukraine war.
European Commission President Ursula von der Leyen announced the proposal to ban Russian coal in a speech last week, which the EU agreed to on Friday: “Yes, we now ban coal. But now, we have to focus on Oil , we have to focus on Russia's revenue from fossil fuels. We really have to make an effort like putting a portion of the money in escrow so we can really limit the source of Russia's revenue from fossil fuels. This is the case It has to end, and this is the next step we have to take together."
"We need to continue to increase the pressure on Russia," EU foreign affairs and security policy high representative Josep Borrell said after meeting with Ukrainian President Volodymyr Zelensky in Kiev over the weekend. More sanctions on the energy sector, including the energy sector . Next Monday, I will convene the EU Foreign Affairs Committee to discuss the next steps.”
He told the European Parliament last week that the EU is spending far more to buy energy from Russia than to help Ukraine fend off an invasion. He said: “We have given Ukraine almost 1 billion euros. It may seem like a lot, but 1 billion euros is what we pay Putin every day for the energy that we have given us. We have given him 35 billion since the war started. euros, and we only gave Ukraine 1 billion euros to arm itself.”
Still, Germany, Hungary and Austria, as well as some other EU member states, remain opposed to an immediate ban on Russian oil imports , even though Germany last week suggested it could end its reliance on Russian oil this year.
Putin's former aide Andrei Illarionov said over the weekend that a total embargo on Russian oil could stop Putin's war. "It's one of the very effective tools that the West still has," he said.
The EU must now decide whether it can inflict economic pain on Putin through the oil embargo.
Brent Crude Oil Daily Chart
GMT+8 at 13:58 on April 12, Brent crude oil was continuously quoted at $100.45 per barrel
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