Page 6 - FSUOGM Week 23 2022

FSUOGM COMMENTARY FSUOGM

EU adopts oil embargo as part of

sixth sanctions package

EU THE European Council has officially adopted Russian oil and oil products in 2021, out of which
the EU sixth sanction package for Russia’s mili- €65bn would be phased out by the end of 2022
tary invasion of Ukraine, according to the June 3 under the sixth sanction package, RBC business
announcement and the official EU journal entry. portal estimated.
As followed by bne IntelliNews, the EU lead- As analysed by bne IntelliNews, even more
ers have agreed in principle to cut 90% of Rus- damaging than the oil embargo itself would be a
sian oil imports by the end of 2022, resolving the ban on insuring and reinsuring tankers carrying
weeks-long stalemate over the sixth sanction Russian oil that was also being prepared by the
package. EU. The formulation on the insurance of tankers
remains vague, however.
Oil embargo The official EU journal states that it is "appro-
As far as the oil embargo is concerned, the phas- priate to prohibit the insurance and reinsurance
ing out of Russian oil will take from six months of maritime transport of such goods to third
for crude oil to eight months for other refined countries" but that the "appropriate transitional
petroleum products. The latest EU oil ban pro- periods should be provided for". The sixth sanc-
posal allows a temporary exemption for pipeline tion package also prohibits the "insurance and
supplies, the key demand of Hungary, which was reinsurance of maritime transport" of "crude oil
blocking the adoption of the sanction package. and certain petroleum products, which originate
“A temporary exception is foreseen for in Russia or are exported from Russia" to third
imports of crude oil by pipeline into those EU countries.
member states that, due to their geographic
situation, suffer from a specific dependence on SWIFT cuts
Russian supplies and have no viable alternative In addition to the oil embargo, the EU will dis-
options,” the EC commented. connect three Russian banks Sberbank (Sber,
Bulgaria and Croatia will also benefit from Russia’s largest state-controlled bank), Credit
temporary derogations concerning the import Bank of Moscow and the Russian Agricultural
of Russian seaborne crude oil and vacuum gas Bank from the specialised financial messag-
oil respectively. ing service (SWIFT). The Belarusian Bank for
In 2021 the EU improted €71bn worth of Development and Reconstruction will also be

P6 www. NEWSBASE .com Week 23 08•June•2022