- The European embargo affects 90% of all the oil that Russia sold before the war.
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| File photo of Ursula von der Leyen, President of the European Commission. |
The sanction imposed on Putin by the European Union, which may finish off the Russian economy, comes into force
The European Union applies from this Monday its embargo on all imports of Russian oil transported by ship to the bloc and also the prohibition on transporting Moscow crude sold to third countries at a price greater than 60 dollars per barrel agreed by the G7 powers.
Agreed upon by the Heads of State and Government at a summit in May, the veto on purchases of Russian oil by the Member States includes an exception for Hungary, which will be able to supply itself through oil that reaches it by gas pipeline thanks to the letter small that Prime Minister Viktor Orbán scratched in these negotiations.
All in all, the European embargo affects 90% of all the oil that Russia sold before the war to community partners, which since March have redoubled their efforts to reduce their dependence on the Kremlin's fossil fuels as much as possible.
In addition, the European Commission stressed this weekend that the cap on the price per barrel agreed with the G7 "does not affect in any way the ban on importing Russian crude oil or petroleum products into the EU" nor does it affect the "exceptions and derogations specifications" that was agreed
It took several meetings of ambassadors to the EU to unblock the cap on the price of Russian crude that the G7 and other international partners such as Australia have been pursuing for months at the proposal of US Treasury Secretary Janet Yellen.
Polish reserves
The main stumbling block was Poland, which, accompanied at first by the Baltics, demanded a much lower ceiling and also sought the guarantee that the bloc would prepare a new package of sanctions against Moscow. By contrast, Greece, Cyprus, and Malta, whose ships transport a large part of Russian oil to other parts of the world, advocated a limit that would not endanger the business of their shipping companies.
Finally, the EU vetoes from Monday the transport of oil sold at a price higher than 60 dollars a barrel and also prohibits European operators from offering insurance and reinsurance services, intermediation, or other financial services to all shipping companies that transport crude oil above from the top.
The measure includes a review mechanism every two months that will allow the 60 dollars to be adjusted downward if the price of oil in international markets falls below that figure. The goal is to ensure that the limit is always at least 5% below the market price.
It also includes a 45-day grace period that will allow European operators to offer transportation or financial services as long as the crude has been shipped before Monday, December 5, and arrives at the port of destination before January 19.
Undermine the revenue of the Kremlin
With this sanction, the EU wants to attack one of the Kremlin's main sources of income to finance its war in Ukraine. According to EU sources, Russia's state revenue from the oil business represents 37% of the budget.
In addition, the European Commission calculates that the cap of 60 dollars is low enough to hurt Moscow's accounts (it calculates that it is now trading barrels at a discount to around 65 dollars), but also high enough so that part of the oil Russian continues to flow to the rest of the world "at a limited price".
The EU wants to take advantage of the weight of its maritime industry and its financial services for the transport of Russian oil. "It will not be easy to replace these European services, at least in the short and medium term, or in any case, it will be very risky," the sources predict.
From Brussels, therefore, it is believed in the existence of "incentives" or "natural interests" for countries that are not part of the so-called "coalition to stop oil" to join the initiative, even indirectly, using the $60 cap on your daily purchase operations.
Faced with this, the Vladimir Putin regime has threatened to stop supplying oil to countries that support or resort to the ceiling of the price of crude oil agreed upon by the seven main powers of the globe.
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