EU leaders agree partial embargo on Russian oil imports

EU leaders on 30 May agreed to a partial ban on Russian oil imports that temporarily excludes pipeline deliveries, in a diplomatic escalation against Moscow for its invasion of Ukraine in late February.

"Tonight, the European Council agreed a sixth package of sanctions. Concretely, it will allow a ban on oil imports from Russia with a temporary exception for imports delivered by pipeline," European Council president Charles Michel said.

He added that 75pc of Russian oil imports will be immediately affected, rising to 90pc of Russian oil purchases by the end of the year.

The measure will exert "maximum pressure on Russia to end the war", and includes provisions to exclude Russia's largest bank Sberbank from the Swift international payment system and to ban three Russian broadcast providers, Michel said.

The partial oil embargo emerges after weeks of negotiations within the EU bloc and makes a critical concession to Hungary, which has previously opposed a full ban at the alleged cost to its national energy security.

Hungarian prime minister Viktor Orban earlier on 30 May had pushed the EU coalition for further compromises.

"Leaving out the pipeline [from the embargo] is a good approach, but in the case of an accident with the pipeline through Ukraine we have to have the right to get Russian oil from other sources," Orban said.

The partial ban will further diminish Russia's dwindling export outlets. Several European buyers are already shunning Russian crude supplies as a result of self-sanctioning or the financial sanctions already in place. Russian production has already fallen by a sharp 870,000 b/d from the previous month to 9.13mn b/d in April, Argus estimates.

The announcement of the EU sanctions, combined with easing Covid-19 restrictions in China, helped send Brent crude futures to a fresh two-month high above $122/bl in Asian trade. The front-month Ice July Brent contract rose as high as $122.43/bl at 9.30am Singapore time (01:30 GMT), up by 0.8pc from the close on 30 May.

By Ruxandra Iordache