The European Union is in talks with oil-producing countries for potential deals to get quickly non-Russian oil supply as it is discussing a ban on imports from Russia, an EU source told Reuters on Wednesday.
The EU and its executive arm, the European Commission, have been considering an embargo on Russian oil as the West is looking to step up sanctions against Russia over its war in Ukraine and deprive Vladimir Putin of one of his key budget revenues—energy sales.
The EU, however, continues to be split on the idea of a Russian oil embargo, with Germany leading the group opposing an immediate ban.
If Germany could be persuaded to start shifting its position on an oil ban—including by a possible proposal of a gradual phase-out in the embargo—the other smaller countries that have been resisting an oil embargo could change their stance, too, according to the Reuters source.
The EU’s embargo on Russian coal imports is also gradual. The ban on Russian coal imports was adopted in early April but is effective only from August, mainly because of Germany’s insistence on more time to find an alternative supply.
Now the EU is working along similar lines to persuade the opponents of a Russian oil ban to agree to an embargo in the new package of sanctions against Russia.
It’s not clear yet when the sixth package would be proposed by the European Commission, but some details—according to Reuters’ sources—would include kicking Sberbank out of SWIFT, banning more Russian media outlets, or banning the import of nuclear fuel. However, some Eastern European countries depend on Russian nuclear fuel for their Russia-designed reactors, which generate a large part of their electricity.
Oil prices could shoot up to a record $185 per barrel if the EU imposes a full immediate ban on Russian oil imports, JPMorgan says.
An EU embargo may be in the works, but drafting and preparing for such a ban would likely take “several months,” European officials told AFP last week.
A ban is in the works at the EU level, France’s Finance Minister Bruno Le Maire said on Tuesday.
“I hope that in the weeks to come we will convince our European partners to stop importing Russian oil,” the minister told Europe 1 radio.
By Tsvetana Paraskova for Oilprice.com
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