EU to Ban Most Russian Oil Imports

Crude oil prices soar in response, as Russia says it will find other importers for its oil.

May 31, 2022

Oil Pump

ALEXANDRIA, Va.—The European Union (EU) agreed to ban 90% of Russian oil imports by the end of the year, reports CNN. The announcement was made after the EU met in Brussels yesterday to discuss a sixth package of sanctions against Russia.

"Agreement to ban export of Russian oil to the EU. This immediately covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine," Charles Michel, president of the European Council, announced via Twitter. "This sanctions package includes other hard-hitting measures: de-Swifting the largest Russian bank, Sberbank, banning 3 more Russian state-owned broadcasters and sanctioning individuals responsible for war crimes in Ukraine," Michel added.

Russian oil delivered by tankers would be banned, while an exemption will be made for the southern segment of the Druzhba pipeline, said Ursula von der Leyen, president of the European Commission, in a press conference. The northern segment of the pipeline serves Poland and Germany, who have agreed to the embargo. The southern part goes to Hungary, Slovakia and Czech Republic.

"As we have a clear political statement by Poland and Germany that they will, as the others, wind down Russian oil, until the end of the year. We have covered overall 90 percent of Russian oil being wind down during this time frame. Leftover is the roundabout 10 or 11 percent that is covered by the southern Druzhba. We have agreed for the moment being for an exemption," von der Leyen said.

In response, Russia said it will find other importers for its oil, reports CNBC.

“As she rightly said yesterday, #Russia will find other importers,” Mikhail Ulyanov, Russia’s permanent representative to international organizations in Vienna, said in a Tweet, referring specifically to von der Leyen. “Noteworthy that now she contradicts her own yesterday’s statement. Very quick change of the mindset indicates that the #EU is not in a good shape,” he added.

Oil prices leaped after the partial oil ban announcement, CNBC also reports. During Asia hours on Tuesday, U.S. crude futures for July were up 3% at $118.48 per barrel, while Brent crude futures rose 1.73% to $123.78. At one point, U.S. crude rose to $119.42 per barrel—a 12-week high, according to Refinitiv data.

Contracts for August also traded higher: WTI crude jumped 3.66% to $116.34, and Brent was up nearly 2% to $119.96 per barrel.

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