New sanctions: the EU imposed an embargo on Russian oil and disconnected Sberbank from SWIFT

Late in the evening of May 30, the leaders of the EU countries agreed on the sixth package of sanctions against Russia, which provides for an embargo on the import of two-thirds of Russian oil and the disconnection of Sberbank from the SWIFT system, reports with the BBC.

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The ban for now will only apply to oil supplies that are delivered by sea, and does not apply to the operation of the Druzhba oil pipeline - this was insisted by Hungary, which claims that it could suffer in the event of a complete ban.

“The agreement to ban Russian oil exports to the EU covers more than two-thirds of Russia's oil imports, cutting off a huge source of funding for its war machine. This is maximum pressure on Russia to end the war,” wrote the head of the European Council, Charles Michel, on Twitter.

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The EU has for now decided to leave imports through the Druzhba oil pipeline, on which Hungary depends. It was she who was against the introduction of a complete embargo, since she imports 65% of her oil from Russia through pipelines.

European Commission President Ursula von der Leyen said the scope of the oil sanctions would be even wider because Germany and Poland had volunteered to roll back their own pipeline imports by the end of this year.

Ursula von der Leyen, who initiated the introduction of the sixth package of sanctions, said on the evening of May 30 that the European Union hopes to abandon 90% of oil imports from Russia by the end of the year. “There is about 10-11% left, which is covered by Friendship,” von der Leyen said. The European Council will review the exemption “as soon as possible,” she added.

What is included in the sixth package of EU sanctions

• An immediate ban on oil supplies from Russia by sea (two-thirds of the total). A temporary exception has been made for the oil pipeline.
• Poland and Germany promise to stop buying Russian oil delivered via the pipeline by the end of the year. Thus, 90% of oil supplies from Russia to the EU will be banned.
• Sberbank, the largest bank in Russia, is disconnecting from the SWIFT system.
• The work of three Russian state-owned media outlets in the EU has been suspended.
• New restrictions regarding “persons responsible for war crimes in Ukraine.”

Charles Michel also said at the final press conference that the decision to continue importing Russian oil through pipelines is temporary.

At present, Russia supplies 27% of oil and 40% of gas imported to the EU. In return, the EU pays Russia about $428 billion a year.

Shutdown of Sberbank

EU leaders also agreed to disconnect Russia's largest bank, Sberbank, from the SWIFT interbank payment system, and to ban three more Russian state media outlets from operating on their territory. It is not officially reported which Russian media outlets were banned, but Politico previously wrote that we are talking about the television companies RTR Planeta, Rossiya 24 and TV Center.

“This package of sanctions includes other tough measures: cutting off Russia's largest bank Sberbank from SWIFT, banning three more Russian state broadcasters and imposing sanctions on those responsible for war crimes in Ukraine,” Michel wrote on Twitter.

On the morning of May 31, Sberbank announced that the introduction of new EU sanctions should not affect its work. In early April, the United States imposed blocking sanctions against Sberbank, according to which its American assets are being frozen.

“Sberbank is operating as normal,” Interfax reported the bank’s statement on Tuesday. — Basic restrictions are already in effect. Disconnection from SWIFT does not change the current situation in international payments. Domestic transactions do not depend on SWIFT and will be carried out by the bank in a standard manner.”

Michel also said following the negotiations that the EU is working to provide Ukraine with assistance in the amount of 9 billion euros to cover its current liquidity needs. It was previously reported that part of this assistance will be provided in the form of grants, and part - in the form of preferential loans. What this ratio will be and from what sources the EU intends to finance the program is still unknown.

From whom does the EU buy gas, oil and oil products

In 2020, the EU bought almost half of all gas, oil and oil products from Russia - 45,35%, Qatar and the United States accounted for about 5%, 20% from Norway and about 12% from Algeria. In the first half of 2021, the EU has already bought 25% of oil from Russia, and almost 30% from other suppliers, 6% from Saudi Arabia, 7,7% from Nigeria, about 9% from Norway, Kazakhstan and the UK from each country and from Iraq 6 %.

The media also reported on May 30 that from the sixth package of sanctions against Russia it was decided to exclude the ban on the purchase of European real estate for Russians - this measure, according to Bloomberg, was abandoned under pressure from Cyprus.
The decision adopted today must go through a technical procedure, after which it will be published in the Official Journal of the EU and then enter into force. This is expected to take place on June 1st.

Position of Hungary

Hungarian Prime Minister Viktor Orban told reporters ahead of an extraordinary EU summit on Monday that the European Commission, in his opinion, approached the issue of a ban on Russian oil imports by EU countries irresponsibly.

According to Orban, the European Commission did not agree in advance on the refusal of energy from Russia with the EU countries, and that is why many of Hungary’s questions regarding the ban remained unanswered. “Energy is a serious thing. We need solutions first and sanctions second,” he said.

Last week, Orbán sent a letter to the head of the European Council, Charles Michel, in which he expressed his unwillingness to discuss the EU's proposed oil embargo at a summit of the bloc's leaders.

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The Hungarian government compared the ban on Russian oil imports to dropping a nuclear bomb on its economy. Budapest is seeking compensation from Brussels for losses associated with the refusal to buy oil in Russia.

Polish Prime Minister Mateusz Morawiecki before the start of the EU summit proposed introducing some kind of price equalization mechanism in the European Union so that Hungary, which resists an embargo on Russian oil, does not benefit from continuing to import it.

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