The European Commission could spare Hungary and Slovakia from an embargo on buying Russian oil, as it grapples with the continent’s dependency on Kremlin-backed imports.
The trading bloc is wary of how dependent the two countries are on Russian energy supplies – and is adopting a flexible approach to its restrictions, opting for a phasing out of Russian oil over the course of 2022 rather than an outright ban.
The European Union’s (EU) governing body is expected to finalise its sixth package of sanctions later this week following Russia’s invasion of Ukraine, including the measures on Russian oil.
The UK has already pledged to discontinue Russian oil supplies by the end of the year, while the US has brought in an outright ban on Kremlin-backed fossil fuels.
So, far Russia has earned €63bn from oil, coal and gas exports in the past two months, with the EU responsible for purchasing two-thirds of its exports.
There is still some concerns over whether the measures will go through, as Hungary remains heavily dependent on Russian oil and repeatedly said it would not sign up to sanctions involving energy.
However, Germany has finally relaxed its opposition to bring in EU-wide restrictions on Russian oil imports,
Germany has revealed it would be able to weather an EU embargo on Russian oil imports by the end of this year even though a stoppage could result in shortages.
Economy Minister Robert Habeck told reporters: “We have managed to reach a situation where Germany is able to bear an oil embargo,.This means it won’t be without consequences.”
Germany last month cut the share of Russian oil to 25 per cent of total imports from 35 per cent before the invasion.
Habeck said the main challenge for Germany was to find alternative oil deliveries to a refinery in Schwedt operated by Russian state company Rosneft, which supplies east German regions as well as the Berlin metropolitan area.
He argued these areas could face supply shortages in the event of an EU embargo if Germany can’t secure alternative oil imports by the end of the year.
The minister said: “We still have no solution for the refinery in Schwedt. We can’t guarantee that supplies will be continuous. There will for sure be price hikes and there will be some outages. But that doesn’t mean we will slide into an oil crisis.”
Despite movements towards banning Russian oil, the EU remains highly dependent on Russian gas and few meaningful moves have been made to reduce the dependency.
Germany and Austria have both ceded to Russian President Vladimir Putin’s demands for rouble payments, using the rouble conversion process to claim they are still paying in Europe.
Both nations have also triggered the early-phase of emergency gas plans in case of supply shortages, which could eventually see them confiscating supplies from private companies.
Separately, Italy is prepared to unveil a new stimulus package on Monday worth up to €7bn ($7.35bn) to curb surging energy prices and help companies cope with the economic impact of the war in Ukraine, unions said after a meeting with the government.
The new stimulus comes on top of around €15bn, already budgeted since January to help firms and households with electricity, gas and petrol prices.