The European Union has agreed to an embargo on most Russian oil imports after late-night talks at a summit in Brussels.
The president of the European Council, Charles Michel, hailed the deal as a “remarkable achievement”, after tweeting on Monday night that sanctions will immediately impact 75% of Russian oil imports, “cutting a huge source of financing for its war machine”.
Ursula von der Leyen, the president of the European Commission, said the ban “will effectively cut around 90% of oil imports from Russia to the EU by the end of the year” because Germany and Poland had committed to renounce deliveries via a pipeline to their territory.
Michel added that the package also included removing access to Swift payments for Russia’s largest bank, Sberbank; banning three more Russian state-owned broadcasters; and further sanctions against “individuals responsible for war crimes in Ukraine”.
Von der Leyen called the agreement on a sixth sanctions package was “an important step forward” and said the bloc had agreed a “massive investment in renewable energy” in order to compensate for the diversifying away from Russian oil.
The EU’s foreign policy chief, Josep Borrell, later tweeted: “A landmark decision to cripple Putin’s war machine. Our unity is our strength.”
Volodymyr Zelenskiy had earlier appealed to EU leaders to show unity against Vladimir Putin. At a summit in Brussels, EU leaders had been attempting to find a way to placate the Hungarian prime minister, Viktor Orbán, who has been holding up a deal on the latest sanctions against Putin’s war machine.
Under a compromise plan that was discussed at the summit, Russian oil transported through the Soviet-era Druzhba pipeline for Hungary, the Czech Republic and Slovakia would be exempt from the EU embargo.
In a press conference on Monday night, Michel acknowledged talk of a lack of European unity, adding: “I think that more than ever it is important to show that we are able to be strong, that we are able to be firm, that we are able to be tough in order to defend our values and our interests.”
Michel said the European Council and G7 was also ready to grant Ukraine €9bn to aid its post-war reconstruction and immediate liquidity needs. However, von der Leyen warned that Ukraine needed €5bn a month just to maintain basic services and “... to give Ukraine a fair chance to rise from the ashes”.
The EU had stalled over its latest sanctions against Russia for nearly four weeks since the Von der Leyen, proposed a complete ban on Russian oil by the end of the year.
Arriving at the summit, Orbán said “the pipeline solution is not bad” but insisted his country needed guarantees it could get oil from other sources if there was an “accident” at the Druzhba pipeline, which runs through war-torn Ukraine. In typically pugnacious style, Orbán attacked the commission for what he called its “irresponsible behaviour” and blamed it for creating a “difficult situation”.
The bloc has come under increasing criticism for slow progress in agreeing the latest sanctions package, the sixth, including from Zelenskiy, who addressed the gathering on Monday by video link.
Ukraine’s president called on leaders to end their disputes, which “only encourage Russia to put more pressure on you”, according to an extract of his speech published on Telegram.
The German chancellor, Olaf Scholz, said earlier he was confident there was a “good solution” on the oil embargo. Germany, along with Poland, has pledged to phase out Russian oil by the end of the year. Officials close to the talks say the decision of these two large economies to forgo oil from the northern leg of the Druzhba pipeline means the EU oil embargo would cover 93% of Russian oil supply by the end of the year.
As yet there is no end date on the exemption for the southern leg of Druzhba, covering Hungary, Slovakia and the Czech Republic, landlocked countries that are heavily dependent on Russian oil.
Latvia’s prime minister, Krišjānis Kariņš, said he intended to warn his fellow leaders not to get “bogged down” in details. “The big picture is that we have to starve Russia, Moscow, of the funds to continue the war,” he said. “If each European country only thinks about itself then we will never move forward.”
Italy, the Baltic states, the Netherlands, Belgium and other countries that import oil on tankers had initial reservations about an exemption for pipeline oil that would give an advantage to those countries that can continue to import cheaper Russian oil. But there was growing willingness to accept an imbalance on the EU’s internal market to secure agreement on sanctions.
Beyond sanctions, EU leaders are expected to approve €9bn in emergency support for Ukraine, although there is no decision yet on whether the funds will be low-interest loans or non-repayable grants.
Ukraine will need hundreds of billions to rebuild destroyed schools, hospitals, residential buildings and infrastructure. The European Commission has proposed a jointly managed reconstruction body to be organised by Ukraine and the EU, with contributions from international institutions.
As EU talks went on, it emerged Russia would cut off gas supplies to the Netherlands on Tuesday, in the latest escalation of the energy payments row with the west. The Dutch-backed trader GasTerra revealed the move after the company refused to meet the Kremlin’s demand of paying Gazprom in roubles. About 15% of Dutch gas comes from Russia.
Some EU leaders are already talking about a seventh round of Russia sanctions targeting gas. But some argue the EU rushed too quickly into an oil embargo. “We talked about oil, under pressure from [the] Baltics and Poland before having done our homework,” a senior EU diplomat said. “Under the pressure of this war we have maybe taken some steps too soon and we are now facing the consequences.”
Additional reporting by Pjotr Sauer
