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Market News Oil prices are going up! EU agrees to embargo on Russian oil
Oil prices are going up! EU agrees to embargo on Russian oil
EU leaders reached a compromise at their summit on Monday to impose a partial oil embargo on Russia that covers only Russian oil imports from the sea, allowing temporary exemptions for imports shipped by pipeline. The new sanctions will also include moves against Russian individuals, the largest bank Sberbank and broadcasters.
2022-05-31
11336
EU leaders reached a compromise at a summit on Monday to impose a partial oil embargo on Russia. The summit focused on helping Ukraine implement a sanctions measure long overdue by Hungary's obstruction.
The watered-down embargo covers only Russian oil imports from the sea, allowing temporary exemptions for imports shipped by pipeline . European Council President Michel said the agreement covers more than two-thirds of oil imports from Russia .
The new sanctions will also include a freeze on personal assets and a ban on personal travel, while Sberbank, Russia's largest bank, will be excluded from SWIFT . SWIFT, a major global financial transfer system, was previously banned by the European Union from several smaller Russian banks. Russia's three major state broadcasters will be banned from distributing their content in the European Union .
"We want to stop the Russian war machine," Michelle said, hailing it as an extraordinary achievement. "It is more important now than ever to show that we can be strong, we can be strong, we can be tough," he added. He said the new sanctions, which need the support of all 27 member states, will be It was legally approved on Wednesday .
The EU has imposed five rounds of sanctions on Russia over the war. The operation targeted more than 1,000 individuals, including Russian President Vladimir Putin, senior government officials, and pro-Kremlin oligarchs, banks, and the coal industry.
But the sixth round of measures announced on May 4 was shelved due to concerns over oil supplies. The standoff is embarrassing for the EU, which has been forced to lower its ambitions to get Hungary to join. When European Commission President von der Leyen proposed the package, the initial goal was to phase out crude oil imports within six months and refined oil imports by the end of the year.
Both Michel and von der Leyen said leaders would return to the issue soon, seeking to secure a later ban on Russian pipeline oil exports to the EU .
Hungarian Prime Minister Viktor Orban has made it clear that he will only support new sanctions if the security of the country's oil supply is guaranteed. The landlocked country gets more than 60 percent of its oil from Russia and relies on crude oil being transported through the Soviet-era Druzhba pipeline.
The head of the EU executive, von der Leyen, had played down the possibility of a breakthrough at the summit, but the leaders came after Ukrainian President Volodymyr Zelensky urged them to end an internal row that would only prompt Russia to put increasing pressure on Europe as a whole. A compromise was reached. Von der Leyen said the punitive move would effectively cut oil imports from Russia into the EU by about 90 percent by the end of the year .
The divisions over the EU's roughly 40 percent of its gas and 25 percent of its oil come from Russia have exposed the limits of the 27-nation trade bloc's ambitions.
Zelensky told the leaders in a 10-minute video address to end the internal debate that would only prompt Russia to put increasing pressure on the whole of Europe. He said the sanctions package had to be agreed and had to be effective, including on oil, so that Moscow could feel the cost of its actions against Ukraine and the rest of Europe. Only then will Russia be forced to start seeking peace, Zelensky said. This is not the first time he has asked the EU to target Russia's lucrative energy sector by depriving Moscow of billions of dollars in daily supplies.
But some EU countries, led by Hungary, are concerned about the impact of the oil ban on their economies, including Slovakia, the Czech Republic and Bulgaria. Hungary is heavily dependent on Russia for energy and cannot afford a complete cut off. In addition to demand for Russian oil, 85% of Hungary's natural gas comes from Russia. Hungarian Prime Minister Orban insisted on a deal at the Brussels summit, stressing the need for Hungary to secure its energy supply.
Von der Leyen and Michel said Germany and Poland's commitment to phase out Russian oil by the end of the year and to forgo oil imports from the northern region of the Druzhba pipeline would help reduce Russian oil imports by 90 percent .
The summit also focused on the EU's continued financial support for Ukraine, agreeing to provide 9 billion euros ($9.7 billion) in aid. Leaders will discuss food security on Tuesday, and they will encourage governments to speed up the establishment of a solidarity channel to help Ukraine export grain and other agricultural products.
Brent Crude Oil Daily Chart
GMT+8 at 10:53 on May 31st, Brent crude oil continuously reported $118.67/barrel
The watered-down embargo covers only Russian oil imports from the sea, allowing temporary exemptions for imports shipped by pipeline . European Council President Michel said the agreement covers more than two-thirds of oil imports from Russia .
The new sanctions will also include a freeze on personal assets and a ban on personal travel, while Sberbank, Russia's largest bank, will be excluded from SWIFT . SWIFT, a major global financial transfer system, was previously banned by the European Union from several smaller Russian banks. Russia's three major state broadcasters will be banned from distributing their content in the European Union .
"We want to stop the Russian war machine," Michelle said, hailing it as an extraordinary achievement. "It is more important now than ever to show that we can be strong, we can be strong, we can be tough," he added. He said the new sanctions, which need the support of all 27 member states, will be It was legally approved on Wednesday .
The EU has imposed five rounds of sanctions on Russia over the war. The operation targeted more than 1,000 individuals, including Russian President Vladimir Putin, senior government officials, and pro-Kremlin oligarchs, banks, and the coal industry.
But the sixth round of measures announced on May 4 was shelved due to concerns over oil supplies. The standoff is embarrassing for the EU, which has been forced to lower its ambitions to get Hungary to join. When European Commission President von der Leyen proposed the package, the initial goal was to phase out crude oil imports within six months and refined oil imports by the end of the year.
Both Michel and von der Leyen said leaders would return to the issue soon, seeking to secure a later ban on Russian pipeline oil exports to the EU .
Hungarian Prime Minister Viktor Orban has made it clear that he will only support new sanctions if the security of the country's oil supply is guaranteed. The landlocked country gets more than 60 percent of its oil from Russia and relies on crude oil being transported through the Soviet-era Druzhba pipeline.
The head of the EU executive, von der Leyen, had played down the possibility of a breakthrough at the summit, but the leaders came after Ukrainian President Volodymyr Zelensky urged them to end an internal row that would only prompt Russia to put increasing pressure on Europe as a whole. A compromise was reached. Von der Leyen said the punitive move would effectively cut oil imports from Russia into the EU by about 90 percent by the end of the year .
The divisions over the EU's roughly 40 percent of its gas and 25 percent of its oil come from Russia have exposed the limits of the 27-nation trade bloc's ambitions.
Zelensky told the leaders in a 10-minute video address to end the internal debate that would only prompt Russia to put increasing pressure on the whole of Europe. He said the sanctions package had to be agreed and had to be effective, including on oil, so that Moscow could feel the cost of its actions against Ukraine and the rest of Europe. Only then will Russia be forced to start seeking peace, Zelensky said. This is not the first time he has asked the EU to target Russia's lucrative energy sector by depriving Moscow of billions of dollars in daily supplies.
But some EU countries, led by Hungary, are concerned about the impact of the oil ban on their economies, including Slovakia, the Czech Republic and Bulgaria. Hungary is heavily dependent on Russia for energy and cannot afford a complete cut off. In addition to demand for Russian oil, 85% of Hungary's natural gas comes from Russia. Hungarian Prime Minister Orban insisted on a deal at the Brussels summit, stressing the need for Hungary to secure its energy supply.
Von der Leyen and Michel said Germany and Poland's commitment to phase out Russian oil by the end of the year and to forgo oil imports from the northern region of the Druzhba pipeline would help reduce Russian oil imports by 90 percent .
The summit also focused on the EU's continued financial support for Ukraine, agreeing to provide 9 billion euros ($9.7 billion) in aid. Leaders will discuss food security on Tuesday, and they will encourage governments to speed up the establishment of a solidarity channel to help Ukraine export grain and other agricultural products.
Brent Crude Oil Daily Chart
GMT+8 at 10:53 on May 31st, Brent crude oil continuously reported $118.67/barrel
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