The Case for and against EU Sanctions on Russian Oil

A large European Union flag lies at the center of Schuman Square outside European Commission headquarters in Brussels, Belgium, May 8, 2021. (Reuters)
A large European Union flag lies at the center of Schuman Square outside European Commission headquarters in Brussels, Belgium, May 8, 2021. (Reuters)
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The Case for and against EU Sanctions on Russian Oil

A large European Union flag lies at the center of Schuman Square outside European Commission headquarters in Brussels, Belgium, May 8, 2021. (Reuters)
A large European Union flag lies at the center of Schuman Square outside European Commission headquarters in Brussels, Belgium, May 8, 2021. (Reuters)

European Union countries on Thursday approved a ban on Russian coal imports from August as part of new measures against Moscow, but are split over whether oil or gas sanctions should follow.

The coal embargo is the EU's first energy sanction against Moscow following its invasion of Ukraine. Officials say the bloc will now discuss sanctions on oil, which represent far bigger imports from Russia than coal.

However, not all countries are on board, with some like Germany and Hungary fearing the economic impact even though civilian killings in Ukraine have increased Europe's resolve to punish the Kremlin.

Russia denies allegations that it has targeted civilians in what President Vladimir Putin calls a "special military operation" to disarm Ukraine.

Here are arguments for and against sanctioning Russian oil.

The case for oil sanctions
Ukraine and EU states including Poland and Lithuania want a ban on Russian oil and gas. Oil is Russia's most lucrative energy export, and blocking it would deprive Moscow of a major revenue stream those countries complain is funding the war.

EU lawmakers on Thursday approved a non-binding resolution for an immediate embargo on Russian energy imports.

Oil and oil products made up more than a third of Moscow's export revenues last year. Currently, Europe spends around $450 million per day on Russian crude oil and refined products, around $400 million per day for gas, and roughly $25 million for coal, according to think-tank Bruegel.

In theory, producers such as Saudi Arabia and the United Arab Emirates have enough spare capacity for Europe to replace the Russian oil it buys, which is roughly half of Russia's total crude exports of 4.7 million barrels per day. However, producer group OPEC+ has so far only committed to incrementally increase output.

The terms of any oil embargo could determine its support among EU states, with options for flexibility including a transition period - like the four-month phase-in agreed for the EU's Russian coal sanctions - or carve-outs for specific products, such as the 10% of Europe's diesel that comes from Russia.

Some countries have suggested halfway measures that would not ban Russian oil purchases, but would withhold some payments for it.

Estonian Prime Minister Kaja Kallas - who supports oil and gas sanctions - last week asked the European Commission to propose skimming off a share of Europe's payments for Russian fossil fuels and placing them in a third-party account instead of sending them to Moscow, effectively imposing a tariff on such imports.

The case against oil sanctions
Germany and Hungary are opposed to an immediate oil embargo, which Berlin has said would risk German economic and social stability.

Russia is Europe's biggest oil supplier, providing 26% of EU oil imports in 2020. Europe gets roughly a third of its gross available energy from oil and petroleum products, in sectors from transport to chemicals production.

Sanctioning Russian supply could push up already-high oil prices, which soared to a 14-year peak last month. Germany, Sweden, France and Italy have announced subsidies to shield motorists from high prices - moves criticized by climate campaigners as fossil fuel subsidies.

Brent crude prices could be around 21% higher on average in 2022 under EU oil sanctions, compared with a reference case where voluntary "self-sanctioning" by companies caused a smaller shut-in of Russian supplies, according to the Oxford Institute for Energy Studies.

The price impact of sanctions would also depend on factors including releases of strategic oil reserves aimed at cooling prices.

Brent crude futures were last trading 0.8% up on Friday at $101.36.

Another concern is that EU oil sanctions could see Russia retaliate by also cutting off the 40% of EU gas it supplies.

Gas sanctions are seen as the last resort in the EU's package of potential energy measures, because of the dependence of European industries and home heating on the fuel, plus the challenges Europe would face to replace Russian supply in a tight global gas market and with limited infrastructure for importing more liquefied natural gas.



Border Town’s Residents Rebuild in South Lebanon as Hezbollah Leader Calls for Israeli Withdrawal 

A bulldozer equipped with a drill works on the rubble of destroyed houses, caused by the Israeli air and ground offensive, in the town of Khiam, southern Lebanon, Monday, Feb. 17, 2025. (AP)
A bulldozer equipped with a drill works on the rubble of destroyed houses, caused by the Israeli air and ground offensive, in the town of Khiam, southern Lebanon, Monday, Feb. 17, 2025. (AP)
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Border Town’s Residents Rebuild in South Lebanon as Hezbollah Leader Calls for Israeli Withdrawal 

A bulldozer equipped with a drill works on the rubble of destroyed houses, caused by the Israeli air and ground offensive, in the town of Khiam, southern Lebanon, Monday, Feb. 17, 2025. (AP)
A bulldozer equipped with a drill works on the rubble of destroyed houses, caused by the Israeli air and ground offensive, in the town of Khiam, southern Lebanon, Monday, Feb. 17, 2025. (AP)

Sabah Abdullah comes to her hometown in Lebanon every morning and sits next to her destroyed home. She is waiting for experts from Hezbollah's construction arm to compensate her for the damage caused by the Israel-Hezbollah war that has left her homeless.

The 66-year-old woman from Khiam now rents a home in the nearby village of Kawkaba and is repairing her small grocery store, which was badly damaged by the 13-month war that ended in late November as a result of a US-brokered ceasefire. The war has left more than 4,000 people dead and over 16,000 wounded in Lebanon and caused damage worth billions of dollars.

“Damage can be compensated but the loss of souls cannot be replaced,” said Abdullah as she sat on a plastic chair in the sun outside her shop.

Israeli forces will remain in parts of southern Lebanon

The 60-day ceasefire that was supposed to end on Jan. 27 with an Israeli withdrawal from Lebanon and Hezbollah ending its armed presence along the border area was extended until Tuesday. But an Israeli official said Monday that Israeli forces will remain in five strategic locations in southern Lebanon after the deadline.

One of these locations is the Hamamis hill on the southern outskirts of Khiam. On Monday, bulldozers could be seen from a distance at work building what appeared to be fortifications in an apparent sign that Israel’s military is planning to stay long beyond Tuesday’s deadline.

Israeli bulldozers work on the Hamamis hill near the town of Khiam, southern Lebanon, Monday, Feb. 17, 2025. (AP)

Hezbollah leader Sheikh Naim Qassem said in a speech Sunday that Israel has to fully withdraw from Lebanon on Tuesday, saying “there is no pretext for five points nor other details.” He added that the Lebanese state should prevent Israel from staying in the country after Tuesday as stated in the ceasefire deal.

The Israel-Hezbollah war began a day after Hamas carried out its deadly attack in southern Israel on Oct. 7, 2023 killing 1,200 people and taking about 250 people hostage triggering the Israel-Hamas war. The Israel-Hezbollah war intensified as of Sept. 23, when Israel expanded its attacks and killed Hezbollah’s longtime top leader and one of its founders, Hassan Nasrallah.

Widespread damage in Khiam

Khiam, one of the largest towns close to the Israeli border, suffered widespread damage, including entire blocks that were turned to piles of debris, while graffiti left behind by Israeli troops could be seen on the walls as well as inside homes. The town's cemetery suffered severe damage, with many graves blown out.

On Monday, workers were removing debris in different locations in Khiam as many residents come during the day to spend a few hours at their homes and leave before sunset since the town still has no electricity or running water. New poles were being put in place by the country’s state-run electricity company as the infrastructure suffered severe damage.

“In Khiam everyone was martyred,” read a graffiti on a wall in Arabic. “Khiam is Golani’s graveyard,” another one read referring to Israel’s Golani Brigade.

In a building on the eastern edge of Khiam, a woman showed a journalist a Star of David sprayed in red at the entrance of her apartment. The woman, who asked not to be named for safety reasons, then walked through her apartment showing a reporter the damage in the sitting room and kitchen.

Lebanese citizens check the destruction on their house caused by the Israeli war, in their hometown Khiam, southern Lebanon, Monday, Feb. 17, 2025. (AP)

Abdallah said when she first came to Khiam days after the ceasefire went into effect in late November, she found that hungry cats and dogs inside her badly damaged shop had eaten cakes, croissants and chocolates. The metal door of her shop was blown wide open, she said.

Seeing her home, which was built by her late father, destroyed saddened her but Abdallah said she is happy that none of her siblings or relatives were hurt during the war.

‘The future is obscure’

Abdallah said that soon after the war ended, Hezbollah’s construction arm Jihad al-Binaa paid her $12,000, of which $8,000 were to compensate her for lost furniture and $4,000 for a year's rent.

Abdallah said that since the Israel-Hezbollah war began she rented a house in Marakaba and had spent most of her savings and was selling some of her jewelry. She said she is now waiting for government experts to visit her and estimate the losses to pay her for rebuilding her two-story house that she shared with her brother.

“I will rebuild my house but the future is obscure. We live close to the border,” Abdallah said, referring to repeated wars with Israel over the past decades.

Another Khiam resident, Dalal Abdallah, said if Israel decides to stay in Lebanon, Israel will be eventually forced to leave again.

“Valuable blood and souls were paid for this land,” she said. She added that “no one should think that we will leave our land.”