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.



Sidelined by Trump, Macron Tries to Rally Europe on Ukraine. But Divisions Run Deep

French President Emmanuel Macron welcomes Germany's Chancellor Olaf Scholz before an informal summit of European leaders to discuss the situation in Ukraine and European security at the Élysée Presidential Palace in Paris on February 17, 2025. (AFP)
French President Emmanuel Macron welcomes Germany's Chancellor Olaf Scholz before an informal summit of European leaders to discuss the situation in Ukraine and European security at the Élysée Presidential Palace in Paris on February 17, 2025. (AFP)
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Sidelined by Trump, Macron Tries to Rally Europe on Ukraine. But Divisions Run Deep

French President Emmanuel Macron welcomes Germany's Chancellor Olaf Scholz before an informal summit of European leaders to discuss the situation in Ukraine and European security at the Élysée Presidential Palace in Paris on February 17, 2025. (AFP)
French President Emmanuel Macron welcomes Germany's Chancellor Olaf Scholz before an informal summit of European leaders to discuss the situation in Ukraine and European security at the Élysée Presidential Palace in Paris on February 17, 2025. (AFP)

French President Emmanuel Macron painted a veneer of European unity by inviting a small number of handpicked European leaders to the Élysée Palace, while the Trump administration sidelined the continent by moving ahead with direct negotiations on Tuesday with Russia on the war in Ukraine. But beneath the diplomatic pageantry, cracks in European consensus were hard to ignore.

One question loomed: Could Europe take charge of its own security, or would it remain reactive to US and Russian decisions?

From Macron’s push for European-led defense to Keir Starmer’s “third way” diplomacy, Giorgia Meloni’s balancing act between Brussels and Washington, and Olaf Scholz’s resistance to breaking with NATO, Europe remains divided on its next move.

France – Macron seeks to take the lead

By hosting the Monday summit in his Parisian palace, Macron reinforced his image of the imperial French “Sun King” and his bid to become the dominant voice on Ukraine and European security. With Germany’s Scholz politically weakened, the UK outside the EU, and Italy leaning toward Trump, Macron has emerged as the bloc’s most vocal advocate for strategic autonomy.

With a presidential mandate until 2027 and France’s nuclear arsenal making it Europe’s only atomic power, Macron has positioned himself as the only leader with both the ambition and authority to act. His proposal for a European-led security force in Ukraine, even in a limited training and logistics role, fits into his broader push for a continent less dependent on Washington.

But forging consensus is proving difficult: Germany is resisting, key frontline EU nations were left out of the summit, and Trump’s unpredictability clouds Europe’s security outlook.

“Since his first term, Macron has sought to impose himself as Europe’s strongman,” said French political analyst Jean-Yves Camus. “He has always presented himself as the natural leader of liberals against nationalist populists. One cannot say that this has worked well.”

While Macron is setting the stage, the question remains: Is Europe ready to follow?

United Kingdom – Starmer’s ‘third way’ strategy

Keir Starmer is charting a different course, positioning himself as Europe’s key link to Washington — while maintaining a firm pro-Ukraine stance.

Having met Trump before the election —“I like him a lot,” the US president said — the British prime minister is set to travel to Washington next week in what some see as an effort to bridge the US-Europe divide, and a hallmark of the “special relationship.”

While Trump moves toward de-escalation in Ukraine, Starmer is doubling down on support for Kyiv, stating the UK is “ready and willing” to send British troops if necessary. This stance stands in contrast to Macron and Scholz’s more cautious approach.

Starmer’s surprising decision not to sign a key international declaration on the future of AI last week — aligning with the US rather than the EU — has raised questions about whether Britain is shifting closer to Washington on broader geopolitical issues.

“The UK is unique in that it’s practically the only major ally that Trump hasn’t purposefully antagonized since his inauguration,” said Anand Sundar, a special advisor at the European Council on Foreign Relations. “The Starmer government is doing everything it can to not put a target on its back.”

Some analysts suggest Starmer is positioning himself as Trump’s European “whisperer,” able to influence the White House while staying in step with Europe.

Italy – Meloni’s balancing act

Giorgia Meloni, the only leader of a major European economy to attend Trump’s inauguration in January, arrived late to the Paris summit and left without making a public statement - moves observers saw as signs of skepticism toward the meeting.

According to Italian news agency ANSA, Meloni questioned why the summit was held in Paris rather than Brussels, the EU’s natural decision-making hub, and criticized the exclusion of frontline states such as the Baltic nations, Sweden, and Finland.

At the summit, she pushed back against deploying European troops to Ukraine, calling it “the most complex and least effective option” - especially without firm security guarantees for Kyiv.

Observers noted that Meloni echoed some of US Vice President JD Vance’s criticism of Europe’s reliance on US protection. “We shouldn’t be asking what the Americans can do for us, but what we must do for ourselves,” she said, according to ANSA.

Despite her skepticism, Meloni still engaged in the talks, bringing Italy’s concerns over long-term European military commitments to the table.

Hungary – Orban’s absence

Notably absent from the Paris talks was Hungarian Prime Minister Viktor Orbán, a close Trump ally and frequent critic of EU policies.

While no official reason was given for his exclusion, some observers saw it as a pointed message from Paris and its European allies about the limits of engagement with leaders seen as too closely aligned with Trump’s worldview.

Germany – Scholz’s irritation

If Macron is stepping forward, Scholz is pushing back.

At the summit, the German Chancellor rejected Macron’s proposal for a European-led security force in Ukraine, calling it “completely premature” and “highly inappropriate” given the ongoing war.

Scholz didn’t hide his frustration, saying he was “a little irritated” that peacekeeping forces were even being discussed “at the wrong time.” He insisted NATO—not an independent European force—must remain the foundation of security.

Due to its historical legacy from the world wars, some argue that Germany has always been willing to cede European security leadership to France, a role the French have pursued since President Charle de Gaulle.

At the same time, the debate over military spending is intensifying, as NATO officials stress the alliance’s 2% GDP target is now a baseline rather than a cap.