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Alexandra Kovalcikova: To ban or not to ban: Russian energy imports in the European Union

Joe Biden’s announcement that the United States would ban imports of Russian oil, liquefied natural gas, and coal exemplified a further intensification of Western sanctions against Moscow in the aftermath of the Russian military invasion of Ukraine (Biden 2022). While the United Kingdom has pledged to move in concert with Washington, announcing that they will be phasing out Russian oil imports by the end of the year, the European Union has yet not followed suit, breaking the previous coordination of sanctions against Russia by the US, UK and EU (Barbaro 2022). Despite the latest sanctions package by the EU, which includes an embargo on coal from Russia, no sanctions have been imposed on Russian oil and gas (Euronews 2022). Why is the EU refraining from taking this step? Can we expect Brussels to move in lockstep with the UK and US again soon?

Comparing dependencies within the transatlantic alliance

Due to sufficient local supply, Russian oil imports account for only 3% of all US oil imports and meets 8% of UK oil demand (Horton, Palumbo & Pauler 2022). Concerning gas supplies, US and UK imports from Russia account for even less (Ibid.). The situation within the EU looks very different. The EU depends on Russia for 27% of its crude oil imports, 47% of its coal, and 41% of its gas imports (Tamma & Hernandez 2022). The reliance on Russian hydrocarbons is even more pronounced for most Eastern European member states, as well as Germany and Italy (Tamma 2022).

However, this dependency is not one-sided: the EU market is crucial for the Russian economy, as the bloc accepts half of the country’s total oil exports and three quarters of its gas exports (U.S. Energy Information Administration 2022). Thus, while the decision of the UK and US to ban Russian oil imports is unprecedented, Klifford Krauss argue that the ban will not represent a fatal blow to the Russian economy and will thus not obstruct the Russian invasion in Ukraine until the EU decides to follow the example of Washington and London (Barbaro 2022).

What speaks for a ban on Russian energy imports?

Based on the described energy interdependence between Europe and Russia, the EU’s dependence on Russian oil alone supplies $285 million a day to Russia’s treasury (Transport & Environment 2022). Thus, it has been pointed out that while the EU’s past sanctions are putting a serious economic strain on the country, its refusal to ban energy supplies is equivalent to “throwing a lifeline” to Moscow (Rasmussen 2022). Considering the alleged war crimes committed by Russian troops, vast civilian suffering, and growing destruction of Ukrainian cities there is a strong moral case to make for the termination of Russian energy imports, as the EU would, in effect, be refusing to directly finance the Russian government’s actions in Ukraine through revenues from oil and gas imports.

What speaks against a ban on Russian energy imports?

The EU has so far been unable to agree on a ban against Russian hydrocarbons because they are too dependent on Russian energy supplies (Tsafos 2022). Especially in countries like Germany, whose economies heavily rely on Russian gas and oil, the government has stated that cutting energy ties with Russia “would not just cause inconveniences to individuals but would inflict damage on the entire society that would ultimately undermine other sanctions” (Appunn 2022). According to Fratzscher, an immediate energy embargo would hardly prevent the Russian government from waging war against Ukraine in the near future, as eventually, Russia would continue financing the war by rapidly redirecting energy deliveries to China and India (Fratzscher 2022). Thus, an immediate energy boycott would rather cause harm for the EU in the short-term and perhaps not even be very effective (Deutschlandfunk 2022). Last but not least, despite Germany's growing acceptance that they should not be paying Putin for Russian hydrocarbons, Orbán has reportedly stated that he intends to block sanctions on oil and gas, thus making it difficult for the EU to reach a consensus (Moens & Weise 2022).

The future of EU-dependency on Russian gas and oil

While the EU has not announced a ban on Russian hydrocarbon imports yet, Brussels has declared its willingness to end the union’s reliance on Russian gas by the end of the decade through the RePowerEU plan, which aims to diversify supply through additional LNG partnerships and the development of renewable energy (Weiser & Wanat 2022). Similarly, member states have introduced measures and plans to reduce their dependence on Russian gas by the end of the year (Reuters 2022; France24 2022; De Clercq 2022; Zimmermann & Posaner 2022). Thus, while the EU will probably not live up to moral expectations right now, it will counter its dependency issues one step at a time.

Written by Alexandra Kovalcikova, Amsterdam Chapter of European Horizons

Source: Loïc Manegarium, Pexels


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