31 May 2022, London/ Brussels – Media reports that an agreement has been reached by EU Member States on the sixth package of sanctions on Russia is a welcome step forward in cutting off the energy revenues funding Putin’s war in Ukraine, though serious issues remain that will limit its effectiveness.
31st May 2022, London/ Brussels – Media reports that an agreement has been reached by EU Member States on the sixth package of sanctions on Russia is a welcome step forward in cutting off the energy revenues funding Putin’s war in Ukraine, though serious issues remain that will limit its effectiveness.
In addition to a ban on all seaborne oil imports – about two thirds of Russia’s crude and fuel exports into the EU – European companies will also be stopped from insuring cargoes of Russian oil. This will go some way to limiting Russia’s ability to pivot its oil exports to other markets, a move that could negate the pressure of European sanctions on the Russian war machine.
Despite the progress that has been made some major issues remain including:
- Carveouts for oil delivered from Russia by pipeline, including a generous exemption for Hungary, with no date set for when it has to end Russian oil imports.
- Implementation of the ban delayed until the end of the year, allowing Putin to continue to benefit from increasingly high oil prices.
- Insufficient measures to reduce Europe’s overall oil demand.
- Continued lack of progress over Europe’s Russian gas imports.
- No significant measures to prevent Greek, Cypriot and Maltese tankers from carrying Russian oil.
Mai Rosner, Campaigner at Global Witness, said:
“Reaching agreement – after weeks of wrangling – is clearly a move in the right direction, but this is not a definitive package of sanctions that will cut off Putin’s vast energy war machine. The fact that Viktor Orbán has held the EU to ransom for weeks and exempted his country from the agreement is scandalous.”
“The people of Ukraine have made it clear that every drop of oil bought from Russia means more bloodshed in Ukraine. This is not a moment for half measures: without his huge oil and gas revenues Putin’s ability to wage war will be eroded.”
“Russia’s invasion of Ukraine has shown the dangers of a global energy system that benefits authoritarian regimes. Europe needs to urgently end its fossil fuel dependency that is destroying the planet, fuelling conflict and making people poorer.”
While the European Commission’s REPowerEU package announced earlier went some way to proposing a long-term plan for EU countries to reduce oil demand, it did not contain sufficient measures to immediately implement oil demand reduction. Taking immediate steps to reduce oil consumption in the transport sector may also help to cushion the effects of Russian retaliation which could involve an immediate stop to all oil exports into Europe.