European Union officials are working on a sweeping plan to block all imports of Russian oil, amid an international outcry over alleged atrocities committed by Vladimir Putin’s forces in Ukraine.
The big question remains whether countries led by Germany will agree to a ban or seek to delay it, after holding out against an embargo on Russian energy imports in recent weeks.
There are signs that Berlin may now be ready at least to consider cutting out Russian oil — even if it is not yet able to abandon imports of gas — in response to what EU officials have described as war crimes in Ukraine.
Officials are now aiming to finalize the package of sanctions ahead of a meeting of EU ambassadors on Wednesday, when it would be signed off, though any ban on oil, or even coal, may not be agreed in time.
The EU spends tens of billions of euros importing about one-third of its oil from Russia and a ban would directly hit President Vladimir Putin’s ability to finance his war. At the same time, such a policy threatens short-term pain for those EU economies which, like Germany, rely heavily on Russia for their energy.
On Monday, four diplomats said that EU countries are considering an embargo on oil imports after leading figures across world united in condemnation at the actions of Russian soldiers.
Shocking images emerged over the weekend of mass graves and dead bodies littering the streets, along with accounts of torture, rape and murder as Russian troops retreated from Bucha, outside Kyiv.
The reports could mark a tipping point in Europe’s response to the war. The EU’s foreign policy chief Josep Borrell on Monday said countries will advance “as a matter of urgency, work on further sanctions against Russia,” calling the reported atrocities “war crimes.”
Imposing an oil ban has been discussed before. Poland and the Baltics have been calling for weeks to stop financing the Kremlin’s war machine via energy payments.
But now, public outrage over the atrocities in Ukraine has led to a renewed sense that Brussels needs to go further than just strengthening the current sanctions.
Poland’s Prime Minister Mateusz Morawiecki rounded on Germany at a press conference on Monday, saying Berlin remains the major roadblock to imposing tougher sanctions on Russia. Even Hungary, he said, was not blocking the move.
French President Emmanuel Macron — who holds the rotating presidency of the EU — on Monday called for more sanctions targeting Russian energy, in particular coal and oil, and said it will coordinate with Berlin.
The German government said Chancellor Olaf Scholz will “coordinate” with Macron. Officials suggested Berlin is softening its opposition to a ban on oil.
Gas plays a much bigger role in heating and providing energy for industrial plants to forego it for governments, especially in Germany. But a ban on oil imports would be much more painful for Russia, as Moscow earns significantly more from selling oil than gas. “We’re looking into separating oil from gas,” one diplomat said.
German Finance Minister Christian Lindner on Monday also indicated that a move on oil was under consideration, saying “at the moment it’s not possible to cut the gas supplies, so we have to differentiate with oil, coal and gas at the moment.”
Sanctions require the unanimous agreement of all EU countries. Over the weekend, the European Commission organized small working groups to try to come up with a compromise that strikes a balance between punishing Moscow and limiting the worst economic pain for EU members who rely on Russian energy.
During these private discussions, roughly three groups of countries have emerged when it comes to Russian energy, according to diplomats. There are those, like Poland and the Baltics, who believe it’s morally inevitable that most energy imports must be stopped sooner rather than later, whatever the economic costs.
In a written statement to POLITICO, Lithuanian Prime Minister Ingrida Šimonytė said “every single European coin paid for Russian gas and oil directly finances war in Ukraine and continuous extermination of the nation.”
Then, there is a group of countries such as Belgium, who aren’t very dependent on oil and gas from Russia but have stopped short of calling for measures they know will be hard for their neighbors.
The third group includes Germany, which fears a deep recession could follow if energy supplies to its businesses and industries are cut too sharply in the short term. The Hungarian government has both publicly and, according to diplomats, behind closed doors, taken a particularly hard stance on this issue.
Austria has also been holding out. Austrian Finance Minister Magnus Brunner on Monday said his country is “against the sanctions in the oil and gas.” Brunner said “you have to stay cool” when it comes to sanctions. “If the sanctions hit yourself more than the other one, I … think that’s not the right way to go.”
Italy has also been more cautious in imposing further sanctions, but officials now say they would not stand in the way if the EU proposed sanctions on energy.
At this point, an agreement is not yet ready on measures to limit Russian energy imports as part of the sanctions package that is due to be discussed by EU ambassadors on Wednesday.
The top representatives are set to approve a package that was already in the works and has now been accelerated, diplomats said. This package would, among other things, focus on listing family members of oligarchs to avoid circumvention of the sanctions, strengthening export controls and hitting more trade in goods used for military purposes.
“There is tremendous work being done now,” one EU diplomat said. “We hope to see the package adopted by Wednesday or Thursday.”
Another EU diplomat said it was important not to rush the discussion on energy as a result of the reports from Ukraine over the weekend. “We have to remain cool-headed,” the diplomat said, pointing to the meeting of foreign affairs ministers next week as a potential deadline for a decision on energy.
This would also buy Germany and others some more time to prepare for the economic fallout.