Ukraine: EU puts total embargo on Russian oil back on sanctions table

Hungary is one of the most reluctant European countries to endorse a Russian fuel embargo.

Here, a gas station with, behind, the MOL Dunai refinery, in the Hungarian town of Szazhalombatta, on March 18, 2022. © Marton Monus / Reuters

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2 mins

As peace negotiations bog down between Ukraine and Russia, the price of oil continues to rise.

Westerners are expected to meet this week to consider further sanctioning Russia.

A possible European embargo on Russian oil is back on the table.

However, until now the Twenty-Seven appeared divided to sanction the sector of Russian hydrocarbons, very important for the economy of Russia.

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It is the Central European states that are the most worried about the implementation of a possible embargo.

Hungary, Slovakia and Bulgaria import most of

.

Poland certainly imports Russian gas, but having coal mines, it is much less dependent for its total energy consumption.

As for Romania, which produces the vast majority of the gas it consumes, it still imports it.

There remains Italy, which plans to find an alternative to Russian gas, but not for at least two years.

If, for all these reasons, the embargo on Russian oil and gas is difficult to implement, the situation may well change.

During the European Council scheduled for this week in Brussels, the Twenty-Seven could commit to jointly purchasing natural gas, liquefied natural gas and hydrogen.

It would be a way to reduce their dependence on Moscow.

Every day, Europe indeed imports nearly 800 million euros of Russian gas and oil.

A " 

total embargo on Russia

 " would amputate the market of " 

15

% of world oil and gas

 "

The price of a barrel of Brent, the benchmark for oil in Europe, and of

jumped on Monday March 21 by more than 6%.

Beyond the war in Ukraine, the renewed tensions in the Middle East also play a role: Saudi Arabia warned on Monday of the risk of a drop in its oil supplies, due to attacks by the Houthi rebels in Yemen against its oil installations.

But according to Philippe Charlez, expert in energy issues at the Sapiens Institute, these attacks are a " 

 " phenomenon and what worries the market the most and therefore causes fuel prices to jump remains a possible " 

 ”.

The more we attack installations, the more we can fear a reduction in supply, since each time we destroy an installation, this installation no longer produces.

And so, it adds to the general panic.

Let's say that this is a very temporary phenomenon, whereas what worries much more today is that a total embargo on Russia, which is the world's third largest producer of oil and the second largest of gas, would amputate both gas and oil around 15%.

So, you can imagine, amputating by 15% an oil and gas market already in rupture supply-demand, there are no more limits at that time.

The Russian-Ukrainian war is turning into a gas-oil war between Europe and South-East Asia in particular because you have to know that the Americans, thanks to their gas and shale oil,

According to Philippe Charlez, expert in energy issues at the Sapiens Institute, "the Russian-Ukrainian war is turning into a gas-oil war between Europe and Southeast Asia in particular"

Altin Lazaj

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