EU leaves many questions open about Russia’s energy embargo

Meeting of EU Energy Ministers

EU Energy Ministers gathered in Brussels for an emergency meeting on May 2 to discuss oil imports from Russia and seek a common response to Moscow’s suspension of gas supplies to Poland and Bulgaria. The EU called this move by Russia an attempt to “blackmail” the West.

In the biggest change to date, Germany has announced it will no longer oppose an immediate ban on Russian oil imports, Deutsche Welle (DW) reports. So far, the 27 EU member states have shown varying degrees of readiness when it comes to cutting Russian imports of coal, gas and oil, but Berlin’s change of heart means the ban Russia’s oil shipments could take effect in the next few days.

Russia supplies 26% of oil imports and 40% of gas to the EU. Several countries, including Germany, rely heavily on this energy source. Leaders in Ukraine have criticized EU countries for continuing to spend hundreds of millions of euros a day on energy purchases from Moscow, arguing that Russia is using the money to launch a military campaign in Ukraine, which has already entered 3rd month.

EU provides more guidance on energy payments

The Kremlin cut off gas supplies to Poland and Bulgaria last week after the two countries rejected Moscow’s demand that “unfriendly countries” pay for gas in Russian rubles.

Under the payment mechanism offered by Moscow, customers must open two accounts at a bank run by Russian energy giant Gazprom. The client pays into a USD or euro account, which is then transferred to a second account and converted into rubles.

The plan caused confusion and member states called on the EU to clarify its position on payments and what constitutes sanctions violations. On May 2, the European Commission warned that full compliance with the plan would violate existing sanctions. EU High Commissioner for Energy Kadri Simson promised further guidance on what is legally possible.

Although many EU countries see the need to limit Russia’s biggest source of revenue, they also acknowledge the risks to the bloc’s economy. It is reported that EU customers can still “circumvent the law” by claiming to have fulfilled their obligations immediately after transferring the gas payment to their USD or euro account.

The EU’s predicament

Payment deadlines, the threat of a recession due to rising energy costs and a host of compliance problems created by Western sanctions have left EU countries in a quandary.

“Russia’s demand for payments in rubles is clearly an attempt to divide the EU. So we must respond in a unified and united way,” Ms. Kadri Simson told the meeting. Ms. Simson said ministers discussed contingency plans for gas supply shocks. According to Simson, Russia’s decision to sanction Poland and Bulgaria shows that Moscow is not a “reliable supplier”.

Polish Environment Minister Anna Moskwa urged countries not to support President Putin’s decree, not to support the initiative to pay in rubles. German Deputy Chancellor Robert Habeck said Berlin would stick to Brussels’ guidelines even if it meant the German economy was hit harder. Germany, the EU’s largest economy, is also Russia’s largest energy customer.

More banking sanctions, gradual energy ban and exemption for Hungary

The sources said the European Commission would propose a gradual ban over six to eight months to give countries time to diversify their energy supplies.

There has been discussion about giving Slovakia and Hungary – two countries that have close ties to Russia and have stated their opposition to the ban – immunity in order to reach consensus among the remaining members of the 27-member bloc. pellets.

In addition to discussions on technical approaches to removing the dependence of the EU economies on Russian energy – such as the call for an EU-wide energy saving mechanism led by the Republic of Ireland and Luxembourg proposed – European Commission diplomats and experts are also working towards a proposal for a sixth package of sanctions. According to diplomats in Brussels, the sixth round of sanctions will target Russia’s largest bank, Sberbank, which will be excluded from the SWIFT international payments system. EU ministers, such as France’s Minister of Ecological Transition Barbara Pompili, have urged the bloc’s members to take steps to “ensure solidarity with colleagues from Bulgaria and Poland”.