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The European Union will have to impose sanctions on Russian oil and gas “at some point”, Reuters has reported, citing the head of the European Council Charles Michel.
"I think that measures on oil and even gas will also be needed sooner or later," the official told the European Parliament today, after yesterday the European Commission announced a fifth round of sanctions on Russia, including on coal imports.
Coal use in the EU had the lowest energy import dependency on Russia in 2020, according to data from the EU’s statistics office Eurostat. Still, Russian coal provided 19 percent of the EU use of solid fossil fuels.
“We will impose an import ban on coal from Russia, worth 4 billion euros ($4.39 billion) per year. This will cut another important revenue source for Russia,” EC President Ursula von der Leyen said on Tuesday. Final approval of the latest sanction package is slated for today.
The EC also signalled oil sanctions were being discussed, with French President Emmanuel Macron calling openly for a ban on Russian oil exports to Europe.
“We have to differentiate between oil, gas and coal, because the substitution periods are different. But what has to be clear is that we have to cut all economic ties with Russia as soon as possible,” said German finance minister Christian Lindner, as quoted by the Financial Times.
In the wake of the Tuesday sanction announcement, Bloomberg noted in a report that Russia accounts for the bulk of European thermal coal imports—the sort of coal used for power generation and heating. A ban in these imports would create a domino effect on the global coal market, the report said, pushing coal prices higher.
“The proposed sanction would be devastating to European coal imports,” Fabian Ronningen, an analyst from Rystad Energy, told Bloomberg. “Some coal can be sourced from other markets, but in general, the global coal market is very tight as well.”
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.