EU agrees on Russian oil sanctions, gives Hungary exemptions

The deal excludes from the embargo shipments by pipeline, which Hungary relies on for Russian oil. It aims to reduce Moscow’s income to finance the war it launched more than three months ago in Ukraine, with some of the toughest EU sanctions yet.

“The important news is that the EU is still united in its purpose; the purpose is to stop Russia’s aggressive war in Ukraine,” Latvian Prime Minister Krisjanis Karins said.

The ban on seaborne imports of Russian oil will be imposed with a phase-in period of six months for crude oil and eight months for refined products, a European Commission spokesperson said.

That timeline would kick in once the sanctions are formally adopted, with EU states aiming to do so this week.

Two thirds of the Russian oil imported by the EU comes via tanker and one third by the Druzhba pipeline.

In total, the embargo aims to cover 90% of all Russian imports by the end of 2022. That would include seaborne deliveries as well as Poland and Germany stopping their own imports of Russian oil via pipeline by then, which they have pledged to do.

The remaining 10% would be temporarily exempt from the embargo so that Hungary, Slovakia and the Czech Republic have access via the Druzhba pipeline from Russia.

Oil prices extended a bull run after the EU’s agreement, stoking concern about inflation, which was ran at a record high of 8.1 percent year-on-year in euro zone countries this month, Eurostat said on Tuesday.

ENERGY PRICES

With energy prices soaring, leaders will ask the EU’s executive Commission to explore ways to curb them, such as through temporary price caps, and work on potential reforms to Europe’s electricity market – a move backed by countries including Spain and Greece, but which countries including Germany have opposed.

They are also set to endorse a Commission plan to wean itself off Russian fossil fuels within years through a faster rollout of renewable energy, improvements in saving energy, and more investments in energy infrastructure.

And they will call for better EU-wide contingency planning in case of further gas supply shocks. Moscow on Wednesday cut gas supplies to the Netherlands for refusing to comply with a demand to pay for gas in roubles, having already cut off Poland, Bulgaria and Finland.