Toughest EU sanctions on Russia so far hit by oil ban concerns

article content

STRASBOURG (AP) — The European Union executive on Wednesday proposed the toughest sanctions package against Moscow over its war in Ukraine, but several countries concerned about the impact of cutting off oil imports from Russia stood in the way of the deal. .

The sixth round of measures, announced by European Commission President Ursula von der Leyen, included sanctions on Russia’s largest bank and a ban on Russian broadcasters from European airwaves, as well as an embargo on crude oil in six months.

article content

The EU is dependent on Russian oil and gas and is faced with the task of finding alternatives when energy prices have skyrocketed.

A handful of Central European countries worry the suspension comes too soon for them to adjust, even though diplomats said Hungary and Slovakia would have until the end of 2023.

Hungarian Foreign Minister Peter Szijjarto said on Facebook that even with such an extension, Hungary would only be able to agree to the measures if crude oil imports from Russia via pipelines were exempt from the sanctions. Slovakia has publicly called for a three-year transition period.

The reluctance to implement measures damaging the EU and Moscow economies has faded in recent weeks as Russia’s invasion of Ukraine brought horrific images of carnage in cities and concerns about a new offensive in the country’s east.

article content

Reflecting widespread anger in the West over Russian President Vladimir Putin’s campaign, which Moscow says is a “special military operation” to defeat dangerous nationalists, the EU chief executive said Moscow must be punished.

“Putin must pay a price, a high price, for his brutal aggression,” von der Leyen told the European Parliament in Strasbourg. “Today we will propose to ban all Russian oil from Europe,” he said to applause in the chamber.

The Commission’s measures include phasing out supplies of Russian crude oil within six months and refined products by the end of 2022. It also proposed to ban all shipping, brokerage, insurance and financing services offered by EU companies for one month. Russian oil transportation. oil worldwide.

article content

The price of Brent crude rose about 4% to more than $109 a barrel by 1330 GMT.

If accepted, the embargo would echo the actions of the United States and Britain, which have already imposed bans to cut off one of the biggest sources of income for the Russian economy, as the West buys more than half of its crude and products. petroleum derivatives to Russia.

Bulgaria, Hungary, Slovakia and the Czech Republic raised concerns about the oil embargo at a meeting of envoys from the 27 EU governments on Wednesday, a source said, noting however that a deal could be reached at another meeting on Thursday or later this week.

RISKY SANCTIONS

Simone Tagliapietra of the Brussels-based think tank Bruegel said a gradual embargo on Russian oil was risky.

article content

“In the short term, it could leave Russia’s revenues high and imply negative consequences for the EU and the world economy in terms of higher prices, not to mention the risks of retaliation (by Russia) on the supply of natural gas,” said.

In addition to oil, the latest round of sanctions proposes hitting Sberbank, Russia’s top lender, by adding it to several banks that no longer have access to the SWIFT messaging system.

The Commission also proposed to sanction the Moscow Credit Bank and the Russian Agricultural Bank, two EU sources told Reuters.

“We hit banks that are systemically critical to the Russian financial system and Putin’s ability to wage destruction,” von der Leyen said. “This will solidify the complete isolation of the Russian financial sector from the global system.”

article content

Sberbank did not immediately respond to a request for comment. The lender, which exited almost all of its European markets in March, has previously said that further rounds of sanctions would not have a significant impact on its operations.

Von der Leyen said more senior Russian military officers would face asset freezes and travel bans from the EU, without giving names, and that the EU would also ban European accountants, consultants and business doctors working for Russian companies.

Russian state broadcasters RTR-Planet and R24 would be banned from European airwaves as part of the latest sanctions, diplomats said.

Von der Leyen also proposed a recovery plan for Ukraine once the conflict ends, saying hundreds of billions of euros in funds were needed to rebuild the country.

“Eventually, it will pave the way for Ukraine’s future within the European Union,” von der Leyen said.

(Additional reporting by Jan Strupczewski, Kate Abnett, Benoit Van Overstraeten, Sabine Siebold, and Gabriela Bacyznska Writing by John Chalmers; Editing by Barbara Lewis)