The European Union has imposed a partial embargo on Russian crude oil and petroleum products, as well as a ban on shipping insurance for oil exports from Russia. But it may be hard to achieve its goal of taking Russian oil off the market and cutting Russian export revenue without hurting consumers in Europe and elsewhere, reports CSIS.
What is included in the EU sanctions package?
On June 3, the European Union adopted a sixth package of sanctions, including a partial embargo on Russian oil. The sanctions will ban seaborne imports of Russian crude oil as of December 5, 2022, and ban petroleum product imports as of February 5, 2023. Pipeline imports of crude oil and petroleum products will be exempt, in a compromise with EU member states like Hungary, Slovakia, and the Czech Republic, which depend on imports via the Druzhba pipeline.
The sanctions package bars those countries from reselling Russian crude oil and petroleum products to other EU member states or elsewhere. The sanctions will allow Bulgaria to continue imports until the end of 2024 and will let Croatia import Russian vacuum gas oil (a refinery feedstock) until the end of 2023. Last year, Russia exported about 3.1 million barrels per day (b/d) of crude oil, natural gas liquids, and refinery feedstocks to Europe, and about 1.3 million b/d in diesel and other petroleum products. It exported approximately 750,000 b/d of crude oil by pipeline and the remainder by tanker.
It took nearly a month of negotiations to achieve unanimous support for this round of sanctions, and a compromise on pipeline imports was unavoidable. But the EU claims that the ban on seaborne imports—as well as Germany and Poland’s voluntary move to halt pipeline imports—will allow it to cut oil imports from Russia by 90 percent.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: CSIS
