Europe ratchets up preparation for Russian oil embargo next week

It has taken weeks for EU countries to agree on the contours of the measure, and intensive talks will continue over the weekend before the European Commission, the bloc’s executive, puts a finalised proposal on paper for EU ambassadors to approve. The ambassadors will meet Wednesday and expect to give their final approval by the end of the week, several EU officials and diplomats involved in the process say.

The diplomats and officials spoke on condition of anonymity because they were not authorised to speak publicly on the progress of the sensitive talks.

The oil embargo will be the biggest and most important new step in the EU’s sixth package of sanctions since Russia invaded Ukraine on Feb. 24. The package will also include sanctions against Russia’s biggest bank, Sberbank, which has so far been spared, as well as additional measures against high-profile Russians, officials said.

Barring an unlikely last-minute demand by Hungary, which has been dragging its feet, the process should be completed without requiring an EU leaders’ meeting — avoiding the time-consuming effort of dragging all 27 heads of state to Brussels.

The embargo is likely to affect Russian oil transported by tankers more quickly than oil coming by pipeline, which could take a matter of months. In both cases, however, it is likely that the bloc will allow its members to wind down existing contracts with Russian oil companies as it did with its coal ban, which was given four months to be fully put in place.

Germany’s position has been critical in finalising the new measure. The country, the bloc’s economic leader, was importing about one-third of its oil from Russia at the time of the Ukraine invasion. But its influential energy minister, Robert Habeck, said this week that Germany had been able to cut that to just 12% in recent weeks, making a full embargo “manageable.”

“The problem that seemed very large for Germany only a few weeks ago has become much smaller,” Habeck told the news media during a visit to Warsaw, Poland, on Tuesday. “Germany has come very, very close to independence from Russian oil imports,” he added, but he did not explain how it was able to accomplish that so quickly.

Russia is Europe’s biggest oil supplier, providing about one-quarter of the bloc’s yearly needs, according to 2020 data — about half of Russia’s total exports. As the oil embargo is phased in, officials said the bloc would seek to make up the shortfall by increasing imports from other sources, such as Persian Gulf countries, Nigeria, Kazakhstan and Azerbaijan.

The embargo, even if softened by a monthslong phase-in period, is likely to put pressure on global oil prices, compounding already high energy costs around the world. An idea to lessen the impact, floated by US Treasury Secretary Janet Yellen last week, was to impose tariffs or a price cap on Russia’s oil instead of an outright embargo. But that did not gain traction with Europeans, officials said.

NY Times