Russian energy exports in the spotlight as Europe plans new sanctions

CNN Business

European officials have indicated that they could sanction Russia’s energy exports After images of mass killings of civilians in Bucha, near the Ukrainian capital.

Josep Borrell, the European Union’s top diplomat, said in a statement Monday that the bloc was working as a “matter of urgency” on drawing up new sanctions against Russia. French President Macron said he would support a complete ban on Russian coal and oil exports to the European Union starting this week.

Speaking to a French broadcaster, Macron said there were “very clear signs” that war crimes had been committed in Bucha and that “it is fairly established that it is the Russian military” that was responsible for them.

“We can’t let it go. There must be sanctions that dissuade what has happened there [in Bucha]what is happening in Mariupol,” Macron said.

Europe has punitive economic sanctions imposed about Russia since President Vladimir Putin ordered the invasion of Ukraine in February. But oil and natural gas exports have so far been spared from the bloc, in part because of differences between member states that rely heavily on Russian energy and those that want to move faster to attack the heartland. of the Russian economy.

But a block on Russia’s gas exports would exacerbate rising inflation in Europe’s economies and could push Germany, Russia’s biggest energy customer, and other countries into recession.

“In the event that Russian gas deliveries were stopped, the situation would worsen,” Deutsche Bank CEO Christian Sewing said in a statement. “A substantial recession in Germany could hardly be avoided.”

Yet shocking scenes in Bucha Over the weekend, a kyiv suburb that was until recently occupied by Russian forces could persuade import-dependent countries to take the economic hit. The bodies of unarmed civilians were found strewn on the roads, bound and shot. Russia has denied any involvement in the incident.

The stakes are high. The European Union imported almost 100 billion euros ($110 billion) worth of Russian energy last year. Russia supplies about 40% of the bloc’s natural gas imports and about 27% and 46% of its imported oil and coal, respectively.

EU leaders pledged to reduce Russian gas consumption by 66% before the end of this year, and break the bloc’s dependence on Russian energy by 2027.

Russian oil has already been banned by the United States and the United Kingdom, and further de facto embargo it has taken hold as banks, merchants, carriers and insurance companies try to avoid incurring financial penalties. The International Energy Agency says Russia could be forced to cap output by 3 million barrels a day, starting this month, as it struggles to find buyers.

Some EU countries want the bloc to go further and have been calling for a ban on Russian natural gas for weeks. One has just taken the step. Lithuanian Prime Minister Ingrida Šimonytė said in a tweet on Sunday that “from now on, Lithuania will not consume even one cubic centimeter of toxic Russian gas.”

German Defense Minister Christine Lambrecht says EU leaders must discuss a ban on Russian gas imports.

Germany has so far ruled out an immediate ban, but a government minister said on Sunday that it must now be discussed.

“There has to be an answer,” he said. “Such crimes must not go unanswered,” German Defense Minister Christine Lambrecht said in an interview with public broadcaster ARD.

Finance Minister Christian Lindne said on Monday that Germany supports more sanctions against Russia, but cutting off gas supplies was not possible at the moment.

“We have to put more pressure on Putin and we have to isolate Russia, we have to cut off all economic relations with Russia, but at the moment it is not possible to cut off the gas supply.” Lindner told reporters in Luxembourg.

“We need some time, so we have to differentiate between oil, coal and gas right now,” he added.

Some fear Hungary, another big buyer of Russian gas, could lift any energy sanctions. Polish Prime Minister Mateusz Morawiecki said on Monday that he would try to “persuade” Viktor Orban, the newly re-elected Hungarian Prime Minister and the EU leader closest to Putinto support a blockade on gas imports.

“I call on the leaders of the European Union to act decisively, to implement actions that finally break Putin’s war machine and take a breath,” Morawiecki. said.

Last week, the United States took advantage of its strategic oil reserves, releasing 180 million barrels of oil on the world market, to help reduce gasoline prices and offset reduced supplies of Russian oil. The IEA also agreed release extra oil of its member countries at an emergency meeting on Friday.

Livvy Doherty, Chris Liakos, Joseph Ataman, Elias Lemercier, Anna Odzeniak, Niamh Kennedy, Inke Kappeler, James Frater, and Mark Thompson contributed reporting.

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