Europe Partially Bans Russian Oil Imports
On June 3, the European Union (EU) formally adopted its sixth sanctions package against Russia. The most recent move includes a measure that will phase out imports of Russian crude oil by sea over the next six months and refined petroleum imports over eight months. The sanctions also prohibit operators within the EU from financing or insuring transportation of Russian oil to third-party countries.
The EU imported approximately $51.5 billion in crude from Russia and $24.7 billion in refined products in 2021. Europe is Russia’s largest oil customer, but buyers in India, China, and Turkey have increased their purchases from Russia, partially offsetting the losses it has suffered from global sanctions.
According to The Hill, the measure approved by the EU does include some exceptions, including:
- A temporary exemption for European nations with a “particular pipeline dependency” on Russia. This provision allows these countries to continue receiving crude oil by pipeline in the meantime. Exempt nations will still be restricted from reselling crude or refined oil to third parties or other European states.
- Bulgaria will be allowed to import crude oil and petroleum products by sea through the end of 2024 due to its “specific geographical exposure.”
- Croatia will be allowed to continue importing the Russian vacuum gas oil it needs for its refinery operations until the end of 2023.
In a statement, the European Council said the sanctions will “make it particularly difficult for Russia to continue exporting its crude oil and petroleum products to the rest of the world since EU operators are important providers of such services.” Read more here.
In related news: The Organization of the Petroleum Exporting Countries and allies, or OPEC+ agreed to increase production sooner to offset output losses from Russia due to Western sanctions. As CNBC reported, OPEC+ will boost production by 648,000 barrels per day (bpd) next month and a similar amount in August, compared with an initially planned increase of 432,000 bpd per month.