Russian oil: EU agrees compromise deal on banning imports

More than 2/3 of russian oil imports will be blocked immediately, with that number rising to 90% by the end of the year.

Not all oil: The ban will only affect oil that arrives by sea but not pipeline oil, following opposition from Hungary which is heavily reliant on russian imports. €400bn ($430bn, £341bn): That’s how much the EU currently pays moscow for oil and gas per year. russia supplies 27% of the EU’s imported oil and 40% of its gas. Gas not included: But so far, no sanctions on russian gas exports to the EU have been put in place, although plans to open a new gas pipeline from russia to Germany have been frozen. European Union leaders have agreed on a plan to block more than two-thirds of russian oil imports. The ban will only affect oil that arrives by sea but not pipeline oil, following opposition from Hungary. European Council chief Charles Michel said the deal cut off a huge source of financing for the russian war machine. It is part of a sixth package of sanctions approved at a summit in Brussels, which all 27 member states have had to agree on.

EU’s sixth set of sanctions:

• russian seaborne oil to be banned by the end of the year, with a temporary exemption for pipeline oil. Two-thirds of russian oil arrives by sea.

• Pledges by Poland and Germany to stop importing pipeline oil by the end of this year will raise coverage of the ban to 90% of russian imports.

• russia’s largest bank, Sberbank, to be cut off from the Swift payment system, which allows the rapid transfer of money across borders

• Three more russian state-owned broadcasters banned

• More restrictions on “individuals responsible for war crimes in Ukraine” EU members spent hours struggling to resolve their differences over the ban on russian oil imports, with Hungary its main opponent. Because of this, the immediate sanctions will affect only russian oil being transported into the EU over sea – two-thirds of the total imported from russia.

But in practice, European Commission President Ursula von der Leyen said the scope of the ban would be wider, because Germany and Poland have volunteered to wind down their own pipeline imports by the end of this year. The European Council will revisit this exemption “as soon as possible”, she added.

The EU’s oil agreement is a compromise deal – but it’s also an important one. moscow is heavily reliant on its energy exports, and the EU says this deal will cut more than 90% of russian oil imports by the end of the year. russia will look for new markets, but in terms of oil that’s not a quick fix. The infrastructure isn’t in place to reorient oil exports from Europe to Asia, for example. And if it does sell to Asia – it will have to do so at a discounted price. There’s also the question of russian gas – an embargo on that could be discussed next.