Thinking The Unthinkable: EU Officials Draft Measures To Ban Russian Oil Imports, Germany Continues To Resist

Since the Russian invasion of Ukraine began, European Union (EU) has been reticent to ban Russian oil imports. This is primarily due to Germany's dependence on Russian energy. High energy costs would make German manufacturing more costly and as a result less competitive. Germany procures 34 per cent of its oil from Russia.

It would also lead to unpredictable changes in European politics. Few weeks ago Germany announced that it is on phase-1 of emergency measures, phase 3 of which is the German state rationing energy.

But Germany's continued purchase of Russian energy has led to allegations of Germany funding Russia's war machine. Recently, the German president who wanted to visit Kyiv and do a là Boris, so to say, was stopped from doing so because the Ukrainians made it clear to the Germans that he wasn't welcome.

Since February 24, EU has introduced 5 tranches of sanctions against Russia. Each tranche more severe than the previous one. Since the atrocities of Bucha came to light, the EU, and Germany in particular, are facing heightened pressure to stop filling Kremlin's coffers through continuation of oil purchases. It is worth flagging that Russia maintains it had nothing to do with the atrocities of Bucha. Be that as it may, scrutiny of EU's refusal to keep energy on the table is real.

As a result of this, EU officials are now considering drafting a measure that would impose an embargo on Russian oil products. According to a report by the New York Times, EU will adopt a phased in ban of Russian oil. This transition period is designed to give Germany and other countries sufficient time to arrange alternative supplies. The EU officials took a similar approach few days ago, when day banned Russian coal, which entailed a four month transition period.

A negotiation regarding this oil embargo will take place between all EU member states. However, considering the fact that France is waiting for the 2nd round of its election, this negotiation will not take place before the 24th of April (which is when France goes to 2nd round of polls).

This waiting period is pertinent because if the negotiations were held before the 24th of April, it would impact energy prices. This impact of more expensive energy prices runs the risk of helping Le Pen and hurting Macron in the elections. Hurting Macron's chances of re-election is not something the EU wants, to put it delicately.

All 27 EU members will have to be persuaded to ensure this embargo becomes a reality. Russia is Europe's largest oil supplier.

Although it still seems unthinkable, it is worth remembering that the idea of Russian central bank's assets being frozen seemed unthinkable too.

The challenge for now is not only finding alternative supplies but also ensuring adequate land transport for two German refineries that as of now are supplied Russian oil via pipelines. One of these refineries is in the city of Schwedt, which is located near the Polish border.

Yesterday (14th April), Vladimir Putin held a meeting with top Russian officials. In the meeting he spoke at length about Europe's dependence on Russian oil and gas. He addressed the prospect of European nations banning Russian oil.

“The consequences of this may be extremely painful, primarily for the initiators of the policy,” he said. He also added that it would be a major disruption to the global economy.

As if echoing the Russian President, Emily Haber, Germany's ambassador to the US, wrote a rather lengthy thread on Twitter. “Going cold turkey on fossil fuels from Russia would cause a massive, instant disruption. You cannot turn modern industrial plants on and off like a light switch. The knock-on effects would be felt beyond Germany, the EU’s economic engine and 4th largest economy in the world,” she wrote.

Meanwhile, a small group of experts at the European Commission (EU's executive arm) continue to draft the new measures, targeting Russian oil. Ironically, this group is led by Björn Seibert, who is Ursula von der Leyen’s chief of staff. Ursula von der Leyen is German, although she did spend significant part of her life in US as well.