The European Union may agree to a ban on Russian oil imports by the end of this week, despite concerns that this would further boost oil prices.
Bloomberg reported this weekend that EU members were discussing a phase-out approach that would see Russian oil imports decline gradually until the end of the year.
The Financial Times, however, later reported that the timeline for phasing out Russian has been moved up to several months.
According to the FT report, Germany, one of the biggest importers of Russian crude, had initially asked for more time to prepare for the phase-out of Russian oil, or until the end of the year. Now, the German government appears to have become bolder and ready to give up Russian oil in several months.
“We’re asking for a considered wind-down period,” Jörg Kukies, adviser to German Prime Minister Olaf Scholz, told the Financial Times. “We want to stop buying Russian oil, but we need a bit of time to make sure we can get other sources of oil into our country.”
On Sunday, German Economy Minister Robert Habeck told DW that complete independence from Russian oil was possible by late summer.
Early on Monday, German Foreign Minister Annalena Baerbock said that such a ban, once imposed, could last for years.
Despite wide agreement on the oil embargo, it could still fail because there are EU members, notably Hungary, which has since the very beginning opposed measures against Russian energy imports.
Decisions on sanctions need to be approved unanimously by all EU members.
The aim of the sanctions is to reduce Russia’s oil and gas revenues, which funds the Kremlin’s war chest, but without causing turmoil on international oil markets. Unfortunately, right now it looks like the turmoil cannot be avoided given the volume of Russian energy exports. Russia is the largest exporter of crude oil and oil products, and also the largest exporter of natural gas.
Besides Russia’s fossil fuel industry, the next round of sanctions will also target more banks as well as access to consultancy and cloud services.
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.