Biden decides on Saudi visit as OPEC+ boosts oil production
Brussels: The European Union (EU) has agreed to slash Russian oil imports in a tough escalation of the bloc’s campaign of sanctions to punish Moscow for its invasion of Ukraine. It’s a landmark decision that will hit Russian coffers in the long term but could also hurt consumers across the European continent.
The move agreed late Monday at an EU leaders’ summit in Brussels comes amid soaring energy prices in Europe and could spark more rises, particularly later this year as nations compete for natural gas supplies to heat homes and fire industries, analysts say.
EU leaders agreed to cut Russian oil imports by about 90 percent over the next six months, a dramatic move that was considered unthinkable just months ago. The 27-country bloc relies on Russia for 25 percent of its oil. “It’s a historic, big deal,” said Robert McNally, an energy adviser to President George W. Bush. “This will reshape not only commercial relationships but political and geopolitical ones as well.”
The ban applies to all Russian oil delivered by sea. It contains a temporary exemption for oil delivered by the Russian Druzhba pipeline to certain landlocked countries in Central Europe. Germany and Poland have agreed to stop using oil from the northern branch of the pipeline. Europe is Russia’s main energy customer, and once the 27 countries have stopped using its supplies, they may not go back.
The EU’s embargo on most Russian oil imports could deliver a fresh jolt to the world economy, propelling a realignment of global energy trading that leaves Russia economically weaker, gives China and India bargaining power, and enriches producers like Saudi Arabia. China and India could be protected from some of the burden of higher oil prices in the short term because Russia is offering them discounted oil.
In effect, Europe is trading one unpredictable oil supplier — Russia — for unstable exporters in the Middle East. Europe’s hunt for new oil supplies — and Russia’s quest to find new buyers of its oil — will leave no part of the world untouched, energy experts said.