Page 10 - FSUOGM Week 12 2022

FSUOGM PIPELINES & TRANSPORT FSUOGM

EU mulls embargo of Russian oil

EUROPE THE EU is mulling whether to ban the import of use European ports? More time to use unsanc-
Russian oil over Moscow’s invasion of Ukraine tioned Russian banks in Europe? Time to pull
There is still – a move that comes when oil prices are already the plug.”
considerable resistance significantly elevated and that could backfire by However, EU foreign policy chief Josep Bor-
to the move. undermining the bloc’s economic recovery. rell has said that while the bloc will look to “con-
There is by no means consensus on the tinue isolating Russia,” concrete further steps
action, with Germany and other EU members such as an oil embargo are premature.
warning that the bloc is too reliant on Russian Moscow has meanwhile warned that an
oil to implement such an embargo. embargo would hurt everyone.
“The question of an oil embargo is not a ques- “This is a decision that would hit everyone,”
tion of whether we want or don’t want [it], but a Kremlin spokesman Dmitry Peskov told report-
question of how much we depend on oil,” German ers on March 21. “Americans would not lose
Foreign Minister Annalena Baerbock told report- much and will feel much better than Europeans.
ers. “Germany is importing a lot [of Russian oil], Europeans would have it hard.”
but there are also other member states who can’t The EU is the largest consumer of crude oil
stop the oil imports from one day to the other.” and petroleum products produced in Russia.
Baerbock instead calls for a more measured While a formal embargo has not been imposed
and phased effort to reduce reliance on Russian yet, sanctions and the resulting problems with
energy. shipping arrangements and payments are mak-
The US and the UK have already pledged ing it difficult for Russia to export its supplies
to phase out Russian oil shipments, but these anyway. The International Energy Agency (IEA)
supplies account for a far smaller share of their has projected that Russian oil output could fall
import mixes. And the UK has even warned by as much as 3mn barrels per day in April as a
against the EU taking such a step because of the result of these problems.
knock-on effect this would have on global prices. These challenges, as well as some traders and
Others like Lithuania are in favour of the buyers actively shunning Russian crude such as
move. “Why should Europe give Putin more BP and Shell, have resulted in Urals’ discount to
time to earn more money from oil and gas?” Brent enlarging to as much as $30 per barrel in
Lithuanian Foreign Minister Gabrielius Lands- recent weeks, compared with a pre-war typical
bergis recently said on Twitter. “More time to discount of $2 per barrel. ™

P10 www. NEWSBASE .com Week 12 23•March•2022