The European Union is on the verge of a “breakthrough” on banning Russian oil imports, as Moscow said it saw its economic ties growing with China after being isolated by the West over its invasion of Ukraine.
With the Kremlin having cut off gas supplies to Poland and Bulgaria for three weeks, MEPs have called on the European Commission to come up with a stronger response and set aside funds to help countries affected by Russian energy aggression. “Putin will cut off supply to other member states. It is just a matter of time,” Green MEP Bronis Ropé told Energy Commissioner Kadri Simson. Also Ukrainian President Volodymyr Zelenskyy told global business leaders in Davos on Monday (23 May) that the world must increase sanctions against Russia to deter other countries from using “brute force” to achieve their aims.
The bloc will likely agree to an embargo on Russian oil imports “within days”, according to Germany’s economy minister, Robert Habeck, even though many of the EU’s 27 member states are heavily reliant on Russian energy, prompting criticism from Kyiv that the bloc has not moved quickly enough to halt supplies. Hungary stuck to its demands for energy investment before it agrees to such an embargo, clashing with EU states pushing for swift approval. The EU has offered up to 2 billion euros to central and eastern nations lacking non-Russian supply. The European Commission and United States were working in parallel on a proposal to cap global oil prices, he said. “It is obviously an unusual measure, but these are unusual times,” Habeck said.
But EU member states need to step up preparations for a possible major disruption of Russian gas supplies, according to the draft conclusions of an EU summit meeting scheduled for 30-31 May. “Preparedness [for] possible major supply disruptions and the resilience of the EU gas market should be improved, in particular through swiftly agreeing on bilateral solidarity agreements and a coordinated European contingency plan,” reads the draft summit communiqué. EU leaders are also expected to welcome the agreement found between EU negotiators on obligatory gas storage, which aims to have EU storage capacity at least 85% full by 1 November 2022. The draft summit conclusions emphasize the short-term need to diversify supply sources and routes as well as secure Europe’s energy supply at affordable prices.
However, EU governments do not have full control over energy prices. Alternative supplies, like liquified natural gas (LNG) from the US, have historically always been more expensive than cheap pipeline gas coming from Russia. To help countries leverage their bargaining power on global LNG markets, the EU has set up a joint gas purchasing platform, which is also open for Western Balkan countries and the three associated Eastern EU partners. The draft summit statement encourages EU countries to use this platform ahead of the next winter heating season.
In response, Russian Foreign Minister Sergey Lavrov said the Kremlin would focus on developing ties with China as economic links with Europe and the US were cut. “If they (the West) want to offer something in terms of resuming relations, then we will seriously consider whether we will need it or not,” he said in a speech, according to a transcript on the foreign ministry’s website. “Now that the West has taken a ‘dictator’s position’, our economic ties with China will grow even faster.”
