European Union Takes a Leap With a Russian Oil Embargo

https://www.nytimes.com/2022/05/04/world/europe/eu-russia-oil-embargo.html

Version 0 of 1.

More than two months into Russia’s brutal war on Ukraine, the European Union on Wednesday announced plans to embargo Russian oil, its biggest economic sacrifice yet to inflict pain on the Russian economy and President Vladimir V. Putin.

The measure unveiled by the president of the European Commission, Ursula von der Leyen, would ban Russian crude oil imports to nearly all of the European Union in the next six months, and refined oil products by the end of the year. The embargo, contained in the sixth round of E.U. sanctions, is expected to win final approval from member countries within days.

The move is a landmark moment in the bloc’s support of Ukraine, severing a longstanding link to Russia and accepting a serious economic hardship for Europe, one which many E.U. countries had resisted.

Their agreement, like the growing supply of weapons to Ukraine, reflects the hardening of Western opposition to Mr. Putin’s invasion of his neighbor, and a calculation that whatever the price for Europe, the cost to Russia will be higher.

“Let us be clear, it will not be easy,” Ms. von der Leyen told the European Parliament in Strasbourg, France, where the announcement was greeted with applause. “Some member states are strongly dependent on Russian oil. But we simply have to work on it.”

Europe depends heavily on Russian fossil fuels, the main source of revenue that has allowed Moscow to build up its military. The E.U. gets about 27 percent of its crude oil imports from Russia and a higher share of its oil products, paying billions of dollars a month.

Diplomats who have seen the proposed sanctions documents, which have not been made public, said that Hungary and Slovakia would be given until December 2023 to ban Russian oil, and more concessions could be made before the embargo was finalized. Those two countries, with outsized dependence on such imports, make up a small fraction of E.U. Russian oil imports.

The phased approach to the embargo reflects how hard — and expensive — European officials expect it will be to find alternatives to Russian oil imports.

The European Union last month banned Russian coal, a fuel that was already getting phased out. Banning Russian natural gas, which most E.U. countries rely on for heating and electricity, has been considered unrealistic in the immediate future, but the bloc has laid out plans to gradually wean itself off it in the coming years.

Talks to finalize the embargo are expected to go until the end of the week, and some details could change. Hungary, in addition to securing more time to cut off Russian oil, said it would seek still more exemptions, while other countries have taken issue with narrow elements of the proposals that would affect them.

The new sanctions plan would also prohibit E.U.-owned shipping companies from transporting Russian oil to destinations outside the bloc, and target the brokering and insurance firms, overwhelmingly based in the European Union and Britain, that help make that shipping possible.

Those steps would deal a serious blow to Moscow’s oil exports that could reverberate far beyond Europe. Much of Russia’s oil is carried by European-owned tankers, in particular Greek-owned ones. Industry research shows that in the weeks after the invasion of Ukraine, Greek tankers carried half or more of Russia’s oil exports to international destinations.

Oil prices rose sharply after Ms. von der Leyen spoke on Wednesday morning, with Brent crude, the international benchmark, shooting up by 3.7 percent, to $108.88 a barrel.

E.U. officials said they were eager to have the embargo formalized by May 9, the day Russia commemorates the victory of the Soviet Red Army over Nazi Germany. Western officials have speculated that Mr. Putin could use the anniversary to make a dramatic announcement in relation to his war in Ukraine.

The new E.U. sanctions package includes penalties against Sberbank, Russia’s biggest bank, Ms. von der Leyen said.

In a highly symbolic move, it would add Patriarch Kirill of Moscow, the head of the Russian Orthodox Church, to the list of sanctioned people and entities, according to diplomats who have reviewed the measures but were not authorized to speak publicly.

The patriarch has proved a divisive figure throughout the war for his unalloyed support of the Kremlin, with critics saying that he has taken his directions from President Vladimir V. Putin of Russia rather than worked to end the fighting. Many victims of the war are members of his flock — though the Ukrainian Orthodox Church broke away from Moscow’s jurisdiction, millions of people in eastern Ukraine, where the fighting is concentrated, remain under the Russian church.

Patriarch Kirill has given a golden icon to a senior Russian military commander as a blessing for the troops, and has said that the Russian army was battling the “Antichrist,” prompting some Orthodox parishes and other institutions outside Russia but under Moscow’s umbrella to break away.

In addition to moving to tighten sanctions, the European Union on Wednesday also promised additional military support for Moldova, the increasingly pressured neighbor of both the bloc and Ukraine.

Moldova has a Russia-backed breakaway region, Transnistria, a thin sliver of land where 10,000 or more Russian troops are stationed, and Moldovan officials worry that Russia could drag their country could be dragged into the war. A Russian general recently claimed that Moscow would seize a land bridge along the Black Sea coast, linking Transnistria to Russia.

Moldovan security fears swelled last week as a series of mysterious explosions rocked Transnistria.

No one claimed responsibility for the attacks, with Russian, Ukrainian and Transnistrian authorities trading accusations, but the explosions exacerbated Moldova’s war jitters.

Charles Michel, the president of the European Council, the body that brings together the leaders of the 27 E.U. countries, said the bloc would “significantly increase” its military support for Moldova.

Moldova, a former Soviet republic with a Romanian-speaking majority, is extremely vulnerable militarily, with only 6,000 troops and a constitutional ban on joining any military alliances, including NATO. In an attempt to step out of Russia’s long shadow, the Moldovan government formally applied in March to join the European Union, but any prospect of membership is years away.

Transnistria lies only 25 miles from Odesa, Ukraine’s chief port, which appears to be a major target in Moscow’s military campaign. The Ukrainian military announced last week that it was moving more troops to the border in response to rising tensions in Transnistria and to a Russian missile strike on a bridge that connects the area around Odesa to the rest of Ukraine.

Neil MacFarquhar contributed reporting from Istanbul, and Monika Pronczuk from Brussels.