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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
The European Union (EU) has agreed a compromise deal blocking about two-thirds of Russian oil imports by the end of the year, as part of a sixth package of sanctions aimed at cutting off a major source of financing to Russia following its incursion of Ukraine.
The EU-wide ban covers seaborne oil imports but temporarily excludes pipeline oil following opposition from Hungary, which imports some 65% of its oil from Russia via pipeline. However, Poland and Germany pledged to end pipeline imports, meaning a total of 90% of Russian oil will be blocked, according to European Commission President Ursula von der Leyen.
It is understood that the EU hopes to end pipeline oil imports to landlocked Hungary, Slovakia and the Czech Republic in the near future. Assurance was given that access to supplies of seaborne Russian oil would be provided in the event of an interruption to pipeline supplies.
Previously, the EU paid Russia some €400bn/y ($430bn/y) for the supply of about 27% of its imported oil and 40% of its gas.
The UK – which meets about 8% of its oil demand from Russia – has pledged to phase out Russian oil by the end of the year.
Oil prices climbed on news of the EU embargo, with Brent crude rising above $123/b, its highest level since March.
Following the latest sanctions announcement, the EU is expected to look to the Middle East and US for oil supplies. Meanwhile, Russia is expected to move its oil sales to friendly nations such as China and India.
Sanctions have yet to be placed on Russian gas exports to the EU. However, plans to open the Nord Stream 2 gas pipeline from Russia to Germany were frozen earlier this year.
Meanwhile, Russia has strengthened its stance on demanding rubles payments from gas importers by halting pipeline supplies to three European companies – Dutch utility company GasTerra, Danish energy company Ørsted and Shell in Germany – after they refused to make gas payments in rubles. Gazprom had already cut supplies to Poland, Bulgaria and Finland after their refusal to pay for gas in rubles.
Last month, the EC updated its plans to accelerate phasing out dependency on Russian fossil fuels. The latest version of the REPowerEU plan increases its green ambitions to transform Europe’s energy system through diversification of energy supplies, significant energy savings and the accelerated roll-out of renewable energy projects.
