European leaders agreed an embargo on the majority of Russian oil imports on Tuesday as they stepped up the pressure on Vladimir Putin over his invasion of Ukraine.
Although the compromise deal struck in the early hours of the morning covers only oil delivered by sea, the EU said it would ban 90 per cent of oil imports from Russia by the end of this year.
European Council President Charles Michel said the oil embargo, part of a sixth package of Russian sanctions, was aimed at putting “maximum pressure on Russia to end the war”, adding that it would cut “a huge source of financing for its war machine”.
However, following opposition from Hungary’s President Viktor Orban, who argued an all-out ban would hurt his country’s economy, the agreement grants a temporary exemption to Hungary, Slovakia and the Czech Republic to continue to import Russian oil by pipeline.
The EU’s top diplomat, Josep Borrell, defended the compromise as a “reasonable way out of the discussion”.
The UK, US and EU have unleashed a wave of sanctions on Putin’s regime following his assault on Ukraine which they say are hurting the Russian economy.
Although the Kremlin has moved to prop up the rouble, Russia’s central bank assets have been frozen and the price of imported goods have risen sharply while major Western companies have pulled out of Russia.
The EU’s latest sanctions also includes an asset freeze and travel ban on more than 50 individuals, while Russia’s biggest bank, Sberbank, will be excluded from Swift, the major global system for financial transfers.
But the EU is now under pressure to cut supplies of Russian gas, crucial to the economies of several European countries including Germany. Estonian Prime Minister Kaja Kallas stressed on Tuesday how difficult it could be to find an agreement on gas.
She said: “All the next sanctions will be more difficult because so far they have only hurt Russians. But now they’re also having effects on Europeans.”
While the UK is less reliant on Russian oil imports than Europe, the embargo risks pushing the price of oil higher with a further knock-on effect for drivers in Britain.
The price of a barrel of Brent Crude oil rose $3 to $123 on news of the EU deal. With the cost of filling a family car with diesel topping £100 on Monday, the surge in oil prices may place Chancellor Rishi Sunak under pressure to do more to ease the rise in prices at the pumps after last week’s £15 billion package.
