EU moves to ban Russian oil imports
Posted 05/05/2022 09:33
Following Russia’s invasion of Ukraine, the European Union has proposed a ban on all Russian oil imports, aiming to phase out Russian crude oil within six months and refined products by the end of the year.
This was announced on Wednesday by European Commission President, Ursula von der Leyen, in light of the war in Ukraine.
The move comes following the EU’s decision in early March to make the member states independent from Russian fossil fuels well before 2030, starting with gas, and the ban on Russian vessels in all its ports announced in April. The U.S. also banned all Russian oil, LNG, and coal imports and banned Russian vessels from its ports while the UK moved to phase out Russian oil by the end of the year and banned Russian vessels from its ports in early March.
In her Wednesday speech at the EP Plenary on the social and economic consequences for the EU of the Russian war in Ukraine, von der Leyen reminded that the Leaders agreed to phase out dependency on Russian energy following the meeting in Versailles. In the last sanction package, the EU started with coal. Now, the EU is addressing its dependency on Russia’s oil.
Ursula von der Leyen said: “Let us be clear: it will not be easy. Some Member States are strongly dependent on Russian oil. But we simply have to work on it. We now propose a ban on Russian oil. This will be a complete import ban on all Russian oil, seaborne and pipeline, crude and refined.
“We will make sure that we phase out Russian oil in an orderly fashion, in a way that allows us and our partners to secure alternative supply routes and minimises the impact on global markets. This is why we will phase out the Russian supply of crude oil within six months and refined products by the end of the year.”
The move is expected to maximise pressure on Russia, while at the same time minimising collateral damage to the Eu and its partners around the globe.
“With all these steps, we are depriving the Russian economy from its ability to diversify and modernise. Putin wanted to wipe Ukraine from the map. He will clearly not succeed. On the contrary: Ukraine has risen up in unity. And it is his own country, Russia, he is sinking,” von der Leyen said.
In an effort to ensure and strengthen European energy security, reduce reliance on Russian fossil fuels, and reduce Europe’s overall reliance on gas, the EU has already made an LNG supply agreement with the U.S., under which the U.S. will supply it with 15 billion cubic meters of LNG this year.
Meanwhile, Germany is looking to ensure its energy security by proposing to build LNG terminals and it has recently allocated about $2.7 billion to build these terminals. Germany is also looking to secure gas supplies from its share of a North Sea field which is bordering with the Netherlands. However, environmental activists in Germany are not happy with the plans and are calling for the government to stop all new fossil fuels projects, in particular, offshore drilling in the North Sea.
Activists in Norway have also staged protests recently, blocking a Russian oil tanker from offloading oil in a Norwegian port, calling on the government to ban the imports of Russian fossil fuels due to the war in Ukraine. Greenpeace Norway also sent “strong-worded letters” to ExxonMobil and the Norwegian government, demanding an end to all Russian oil and gas.
Russia’s war in Ukraine has exacerbated the energy market crisis, pushing the oil prices up to levels not seen in years. Over a month ago, in response to the market turmoil, the U.S. revealed plans for the largest release from the strategic petroleum reserves in American history. Days later, the International Energy Agency’s 31 member countries agreed to a new release of oil from emergency reserves.
As a result, over the next six months, around 240 million barrels of emergency oil stocks, the equivalent of well over 1 million barrels per day, will be made available to the global market.
On the other hand, the UK plans to ensure its energy independence through a new strategy, announced by the government in early April, committing to support oil and gas projects in the North Sea and speed up the deployment of renewable energy sources while Denmark has decided to speed up its renewable energy production and temporarily boost its gas output from the North Sea fields in a push to secure independence from Russian fossil fuels.