Europe wants to halt Russian oil imports, Switzerland little concerned –

The European Union could ban all imports of Russian petroleum products by the end of the year. The proposal still needs to be unanimously approved by the Member States. “It will not be easy,” admitted European chief executive Ursula von der Leyen.

To increase pressure on Moscow, the European Union (EU) sent member states its proposals for a sixth package of sanctions against Russia on Tuesday. In particular, it plans to phase out Russian supplies of crude oil within six months, and of refined products by the end of the year.

“It will be a complete ban on the importation of all Russian oil, transported by sea or pipeline, crude and refined … in an orderly manner, in a way that will allow us “other supply routes”, European Commission President Ursula von der Leyen explained during a presentation to MEPs in Strasbourg on Wednesday that it is a matter of “making President Vladimir Putin pay a heavy price”.

Adoption not yet guaranteed

But this transition will not be without problems for Europe, in a context where Russian oil represents more than a quarter of EU oil imports. Thus, the cessation of imports will be “gradual and orderly, in order to establish alternative supply routes and minimize the impact on global markets,” Ursula von der Leyen confirmed. But “it won’t be easy,” she acknowledged, as several countries are “highly dependent.”

“Any new package of sanctions against Russia is more difficult to define because it imposes political choices on each Member State. Unanimity is necessary and there is nothing guaranteed for its adoption,” stressed a European official.

In particular, German Energy Minister Robert Habeck confirmed that in this situation he “cannot guarantee that there will be no disruptions” in Germany’s oil supply.

In 2021, Russia supplied 30% of crude oil and 15% of EU-purchased petroleum products. It supplies 150 billion m3 of gas annually.

Hungary rejects the project, despite an exception

According to several European officials and diplomats, the Commission’s draft provides for an exemption for Hungary and Slovakia. These two countries, landlocked and completely dependent on supplies through the Druzhba pipeline, will be able to continue their purchases from Russia into 2023 in the absence of connections to the rest of the EU, one of these officials said.

But despite this deviation, Hungarian Foreign Minister Peter Szijjarto announced on Wednesday that his country rejected the Commission’s proposal “as it stands”, saying that such a measure would “completely destroy the country’s energy security”. According to him, the period of one year is not enough. “With all responsibility, we cannot vote,” he said in a video message on his Facebook page.

For his part, Kremlin spokesman Dmitry Peskov also recalled that these sanctions were “a double-edged sword”. “By trying to hurt us, they will also have to pay a high price. They are already paying it. And the cost of sanctions for Europe’s citizens will increase by the day,” he warned.

>> Comment from Isabelle Ory, correspondent in Brussels:

Isabelle Ory, correspondent in Brussels, analyzes the consequences of the embargo on Russian oil / 12:45 / 1 min. / today at 12:45

Switzerland little affected

So far, Switzerland has resumed European sanctions and should continue on this path. However, if an embargo is passed on Russian oil, its supply should not be too much affected. Even if Switzerland has a high consumption of liquid energy sources in international comparison, Fabian Bilger, from the association of fuel importers “Avenergy Switzerland”, wants to be reassuring. Only a small portion of the crude oil imported into the country comes from Russia.

Nearly 20 years ago, almost a third of the oil imported into Switzerland came from Kazakhstan, a country under Russian influence, or from Russia. In 2020, the cards were redistributed, with the United States becoming Switzerland’s second most important supplier, after Nigeria. And Kazakhstan and Russia now weigh less than 6% of the total.

>> See also Pascal Jeannerat’s analysis of the impact about Switzerland of a potential embargo:

Switzerland will be little affected by the European embargo on Russian oil: Pascal Jeannerat's analysis [RTS]

Switzerland will be only slightly affected by the European embargo on Russian oil: analysis by Pascal Jeannerat / 7:30 pm / 1 min / today at 7:30 pm

The expected markets

In addition, according to Fabian Bilger, crude oil imports represent only 25% of total oil imports. The remaining 75% consists of already refined oil from the EU. And according to the specialist, the oil market is very flexible. Russian oil can be quickly replaced by oil from other producing countries. Certain refineries would certainly face logistical challenges under an embargo, but the market as a whole could adapt.

Finally, as far as the oil price is concerned, Fabian Bilger assumes that some of the effects of the sanctions have already been foreseen. “Commodity traders in Europe seem to have already responded to the threat of an embargo and are buying significantly less Russian oil,” explains the expert.

>> See also on the same topic: Could Switzerland be affected by a possible cessation of Russian gas supplies?


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