On the first day of a two-day summit, the European Council agreed on a sixth package of sanctions that bans 75% of Russian oil imports and sets a 90% target for the end of the year.
European Council President Charles Michel said in a tweet, “Agreement to ban export of Russian oil to the EU,” adding, “This immediately covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine. Maximum pressure on Russia to end the war.”
Tonight #EUCO agreed a sixth package of sanctions.
— Charles Michel (@eucopresident) May 30, 2022
It will allow a ban on oil imports from #Russia.
The sanctions will immediately impact 75% of Russian oil imports. And by the end of the year, 90% of the Russian oil imported in Europe will be banned. pic.twitter.com/uVoVI519v8
European Commission (EC) President Ursula von der Leyen noted that the oil embargo “will effectively cut around 90% of oil imports from Russia to the EU by the end of the year.”
She clarified that the ban applies to Russian oil delivered by tankers; the bloc imports two-thirds of the Russian oil via tankers. The EC President added that exemptions would be made for the southern part of the Druzhba pipeline, which accounts for 10% of Russian oil imports. The southern segment of the pipeline serves Hungary, Slovakia, and the Czech Republic, while the northern part serves Poland and Germany, which have both agreed to back the embargo.
The exemption comes after fierce opposition from Hungary and weeks of negotiations between the EU and Budapest.
Hungary imports 65% of its oil from Russia via pipelines and was thus steadfastly against any proposals that impacted the southern segment of the Druzhba pipeline.
#Oil prices jump almost 2% as EU leaders agree on a partial embargo on Russian oil at summit. Sanctions cover more than 2/3 Russian oil exports to EU. pic.twitter.com/uISgz4bKyQ
— Holger Zschaepitz (@Schuldensuehner) May 30, 2022
During the summit, Hungarian Prime Minister Viktor Orbán accused the Commission of mishandling oil embargo negotiations with member states. He remarked that “energy is a serious issue” requiring “solutions and then sanctions.”
Nevertheless, Orbán agreed to support the Russian oil embargo in exchange for exemptions on pipeline imports and assurances from bloc leaders that emergency measures would be introduced “in case of sudden interruptions of supply.”
Other landlocked countries such as Slovakia and the Czech Republic also demanded time to wean their dependence on Russian oil.
For instance, while Slovakia has stood in support of Ukraine, it remains heavily dependent on Russian oil, receiving respectively around 75% of its energy supplies from Russia.
However, von der Leyen said the Council would reconsider the 10% exemption “as soon as possible.”
EU member states that import Russian oil via tankers—Italy, Latvia, Estonia, Lithuania, the Netherlands, Belgium, and others—have raised concern about the pipeline exemption, as it allows those countries to import cheaper Russian oil amid a surge in global oil prices. In this regard, Italy and co.’s willingness to accept “an imbalance on the EU’s internal market” helped secure the agreement on sanctions.
The sixth package of sanctions also removes Russia’s largest bank, Sberbank, from the SWIFT international banking system, bans three-state-owned Russian broadcasters, and sanctions individuals accused of war crimes in Ukraine.
I am glad that tonight leaders agreed in principle on the sixth sanctions package. This is an important step forward.
— Ursula von der Leyen (@vonderleyen) May 30, 2022
We also agreed to work on a mechanism to provide Ukraine with a new, exceptional macro-financial assistance package of up to €9 billion. https://t.co/La3bZl6JNp
The decision comes after Ukrainian President Volodymyr Zelensky chastised the bloc for being “too soft” on Moscow and funding Russia’s war machine by delaying sanctions on Russian oil and gas. Zelensky questioned the bloc’s dependence on Russia in a video address, saying, “Russia must be dependent on you. Why can Russia still earn almost a billion euros a day by selling energy?.”
Europe imports 40% of its energy requirements from Russia. According to Eurostat, Russian crude accounted for 27% of the bloc’s imports in 2021, or 2.4 million barrels per day. According to International Energy Agency, 35% of that was delivered via pipelines.
During the summit, EU leaders also backed a $9.7 billion loan package and small grants to help Ukraine with its day-to-day operations. Additionally, leaders endorsed the establishment of an international fund for post-war reconstruction efforts. On this topic, von der Leyen remarked that Ukraine requires $5.4 billion per month to maintain essential services and “rise from the ashes.”
From May 2021 to April 2022, 53% of Russian oil went to the European Union compared to 26% to China
— Samuel Ramani (@SamRamani2) May 26, 2022
While China talked of a no-limits partnership with Russia, EU money propped up Russia's war machine much more
This comes just two weeks after the G7 pledged to provide Ukraine with $18.4 billion in humanitarian assistance.
European leaders will again meet in Brussels today to discuss measures to export Ukrainian grain to global buyers via road and railways since Russia has blocked the country’s access to the Black and Azov seas since March.
Russia has been accused of weaponising food exports, given that both Russia and Ukraine are among the world’s largest wheat exporters, accounting for almost 30% of global wheat supplies.
However, Russian President Vladimir Putin has countered that the “real reason” for global shortages in food supplies is the “erroneous economic and financial policies of Western countries, as well as the anti-Russian sanctions imposed by them.”