US, Europe edge towards ban on Russian oil imports

Oil prices have soared over the past week after the United States and its allies sanctioned Russia over the invasion. PHOTO: BLOOMBERG

WASHINGTON - International oil prices broke briefly through US$130 a barrel on Sunday (March 6) evening, their highest since 2008, as the United States and its European allies edged towards banning imports of Russian oil.

“We are now in very active discussions with our European partners about banning the import of Russian oil to our countries while, of course, at the same time maintaining a steady global supply,” US Secretary of State Antony Blinken said on Sunday. 

The US would act in coordination with its allies, but would not “rule out taking action one way or another irrespective of what they (the allies) do”, he told cable channels. 
“But (in) everything we’ve done, the approach starts with coordinating with allies and partners.”

Europe, however, is in a dilemma because of its dependence on Russian energy.

Russia, as the world’s third-biggest oil and second-largest gas producer, is a major supplier of oil and coal to Europe – around 27 per cent and 47 per cent of imports, respectively. 

Europe is particularly vulnerable in terms of natural gas, getting around 40 per cent of its demand from Russia. 

But now there is growing clamour to wean Europe off Russian energy.

European Commission president Ursula von der Leyen told CNN on Sunday: “The goal is to isolate Russia and to make it impossible for (Russian President Vladimir) Putin to finance his wars. For us, there is a strong strategy now to say we have to get rid of the dependency on fossil fuels from Russia.” 

But German Chancellor Olaf Scholz on Monday said the European Union’s energy needs could not be secured without Russian imports.

In Britain, Foreign Secretary Liz Truss said officials had been asked to explore the idea of a “ceiling” on Russian energy imports that would bring them down over time – mitigating the economic shock

“Nobody is under any illusions any more,” International Energy Agency director Fatih Birol said last week. 

“Russia’s use of its natural gas resources as an economic and political weapon shows Europe needs to act quickly to be ready to face considerable uncertainty over Russian gas supplies next winter.” 

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Ms Barbara Pompili, the minister for ecological transition of France, which currently holds the EU presidency, said: “More than ever, getting rid of Russian fossil fuels, and of fossil fuels in general, is essential.” 

Japan is also reportedly considering halting imports of Russian oil, though the government in Tokyo is equally concerned about the domestic economic impact. 

The US imports only around 8 per cent of its oil from Russia. 

“US energy security is pretty good,” tweeted Dr Paul Sullivan, senior fellow at the Atlantic Council’s Global Energy Centre. “It is much better than that of the EU. We are not as dependent on outside oil as we once were. We are in much better shape than the EU (with regard to) oil and gas. We have good energy security for both.” 

Meanwhile, in a move that has economies bracing themselves for inflationary pressure, Ukraine, one of the world’s leading producers and exporters of grain and vegetable oils, has introduced export licences for wheat, corn and sunflower oil, poultry and eggs. 

Earlier, the government had suspended exports of rye, oats, millet, buckwheat, salt, sugar, meat, and livestock.

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