Europe steps back from US effort to ban Russian oil and gas

There are fears such a drastic move could have severe economic consequences

Europe relies on Russia for crude oil and natural gas but has become more open to the idea of a ban on Russian products. AFP

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European countries distanced themselves from a US effort that may result in a ban on Russian oil imports, as leaders from Moscow and Kiev prepared to meet in Belarus for a third round of ceasefire talks.

Western countries are in agreement that they must move away from their dependence on Russian gas. There are disagreements over how quickly that should happen and if the Russian oil and gas industry should be sanctioned following Moscow’s invasion of Ukraine.

“Europe has deliberately exempted energy supplies from Russia from sanctions,” German Chancellor Olaf Scholz said on Monday.

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“Supplying Europe with energy for heat, mobility, electricity supply and industry cannot be secured in any other way at the moment. It is therefore of essential importance for the provision of public services and the daily lives of our citizens.”

Europe relies on Russia for crude oil and natural gas but has become more open to the idea of a ban on Russian products.

UK Prime Minister Boris Johnson, speaking alongside Canadian Prime Minister Justin Trudeau and Dutch counterpart Mark Rutte, said “we have to be mindful” that some countries held “different dependencies”.

“You can’t simply close down use of oil and gas overnight, even from Russia. That’s obviously not something every country around the world can do,” he said, adding that the UK could quickly shift away from Russian gas.

“What we need to do is make sure we are all moving in the same direction, and we all share the same assumptions and we accelerate that move, and I think that is what you are going to see. You’ve heard that from leaders around the world,” Mr Johnson said.

“But clearly there is going to be a transitional period. We are going to have to look for supply, we are going to have to look for substitute supplies from elsewhere, and we are going to have to do it together across the entire coalition of countries that is now condemning Putin’s actions.”

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Cars are left abandoned on a road as residents flee the town of Irpin, Ukraine after days of heavy shelling. Reuters

Mr Rutte conceded that it was a “painful reality” that many countries were “still very much dependent on” Russian gas and oil.

The price of oil surged on Monday to its highest for 14 years after Washington revealed that it is in talks with European allies over a ban on Russian imports.

Gas prices soared by more than 70 per cent to hit an all-time high as fears over supplies from Russia continued to rock the market.

Prices are now more than 20 times higher what they were two years ago, increasing on Monday from records set last week.

The EU relied on Russia for about 46 per cent of its gas and around a quarter of its oil in the first part of last year.

“We have to dramatically reduce our dependency on gas and oil from Russia. That will take time,” Mr Rutte said.

Forcing companies to stop doing business with Russia now would have “enormous consequences”, he said.

“It would basically undermine supply chains the world over, particularly in Europe. It would also have an impact on Ukraine itself.”

US President Joe Biden was scheduled to hold a video conference call with the leaders of France, Germany and the UK on Monday as his administration sought their support for an imports ban.

During a visit to Latvia, US Secretary of State Antony Blinken called Russian attacks on humanitarian corridors "shameful", but he again ruled out a Nato-imposed no fly zone over Ukraine.

“There continue to be reports of attacks by Russian forces on agreed upon humanitarian corridors," he said. "We’ve seen scenes like this before in Europe. Now Russia is starving out cities like Mariupol. It’s shameful."

French President Emmanuel Macron on Monday accused his Russian counterpart Vladimir Putin of hypocrisy and cynicism after Moscow said it would open humanitarian corridors to civilians from several Ukrainian cities to leave, but only to Russia or Belarus.

"All this is not serious, it is moral and political cynicism, which I find intolerable," he said.

Updated: March 07, 2022, 6:30 PM