— The European Union is putting the finishing touches on a decision to phase out purchases of Russian oil and its derivatives as part of the sanctions imposed on Moscow amid its invasion of Ukraine, and will announce a timetable for new measures this week, according to European sources.
“There is political will to stop buying oil from Russia and next week we will have measures and a decision to phase out,” said a European official involved in the talks.
The European Commission is to submit a proposal for a ban “with a transitional period until the end of the year”, according to a European diplomat.
But the European official stressed that the decision is “not easy to implement” due to two difficulties.
Two landlocked European countries, Hungary and Slovakia, depend on Russian oil pipelines and are not connected to any of the European oil pipelines. Therefore, it is necessary to find infrastructure or alternatives.
On the other hand, it is necessary to ensure that European decisions do not lead to an increase in oil prices, which would be counterproductive.
The announcement of a European effort aims to diversify sources of supply and set a timetable for stopping purchases of oil and its derivatives from Russia for six to eight months to avoid a boom in the markets.
Over the weekend, the European Commission held talks with the hardest-hit member states, the US and the International Energy Agency, to finalize a proposal to be presented to the bloc’s member states.
During a visit to Chile, EU foreign policy chief Josep Borrell said on Sunday that “the upcoming new package of sanctions is irreplaceable.”
“We must use our economic and financial leverage to pay Russia the price for its actions,” he said, adding that the bombing of the Odessa airport meant that Moscow “has the intention of depriving Ukraine of its seaport.”
The imposition of sanctions on Russian oil requires the unanimity of member states. A European official said: “Hungary has so far imposed sanctions in a timely manner, and giving it an excuse to prevent (sanctions) related to oil should be avoided.”
The sixth package of European measures, prepared by European Commission President Ursula von der Leyen, is aimed at imposing sanctions on the entire Russian oil system. In the short term, one of the measures will be aimed at increasing the cost of sea freight for Russian oil.
Several European diplomatic sources have indicated that Sberbank, Russia’s largest and with the largest market share at 37 percent, will be excluded from the SWIFT system for international money transfers.
The European Union is trying to stop funding this project because of the Kremlin’s war in Ukraine. Russia exports two thirds of its oil to the European Union.
In 2021, the European Union imported 30% of purchased crude oil and 15% of purchased petroleum products from Russia.
