(Bloomberg) — The European Union proposed a ban on Russian crude oil phased in over the next six months, part of the bloc’s sixth package of sanctions as President Vladimir Putin seeks to cement military gains in Ukraine.
Germany threw its weight behind the EU plan, though Hungary said it won’t back the proposal as it stands and other nations asked for more flexibility. The Kremlin called the measure a “double-edged sword” as it will impact households. The EU is also proposing to cut off Sberbank and other lenders from the international SWIFT messaging network used by financial institutions.
Russia’s war in Ukraine is nearing the 10-week mark. Having failed to achieve a quick victory, Moscow is focused on reinforcing both military and political control over territory taken so far, according to people familiar with the Kremlin’s thinking.
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Key Developments
- Russia Seeks to Annex Occupied Ukraine as Invasion Goals Shift
- EU Squeezes Harder on Russia, Sweeping in Oil, Bank and Business
- EU Aims to Target Russia’s Global Oil Sales With Insurance Ban
- Russian Oil Embargo Risks More Inflation Trouble for Europe
- Germany, Netherlands Push North Sea Drilling to Shun Russian Gas
All times CET:
EU Tussles With Holdouts Over Latest Sanctions (3:10 p.m)
EU diplomats discussed the sixth package of sanctions Wednesday, with Hungary objecting to the oil phase-out timing. Greece, Malta and Cyprus raised questions about banning transport of oil between third countries, saying the move will just help Europe’s competitors, according to two diplomats. The diplomats aim to conclude the package by the end of the week, or by May 9 at the latest, the diplomats said.
Greece and Cyprus have large shipping industries while Malta is a so-called flag state, where companies can register their vessels for ownership purposes.
U.K. Bars Russia From Using Consultants (2:45 p.m.)
The U.K. cut Russia off from using management consultants, accountants and public relations firms, part of a further tranche of sanctions.
The government in London also announced additional measures against 63 Russian individuals and organizations, many of them targeting people connected to news outlets in an effort to punish what it called “the spread of lies.”
Portuguese Premier to Visit Kyiv Soon (2:30 p.m.)
Portuguese Prime Minister Antonio Costa announced he will travel to Kyiv in the near future to sign a “significant” financing agreement, part of the International Monetary Fund’s support for Ukraine.
“Regardless of the dynamics of the EU accession process, we have to provide immediate answers to the emergency needs of the Ukrainian state and the Ukrainian people,” Costa said.
EU Plans to Block Russians From Buying Real Estate (1:50 p.m.)
The EU added a ban on property transactions with Russian nationals to its latest sanctions. The European Commission’s proposal would halt property deals with Russian citizens, residents and entities — prohibiting the sale or transfer, directly or indirectly, of “ownership rights in immovable property located within the territory of the Union or units in collective investment undertakings providing exposure to such immovable property,” according to the legal text seen by Bloomberg.
EU Suggests Sanctioning Russian Patriarch Kirill (1:20 p.m.)
The EU is also proposing to sanction Patriarch Kirill, the head of Russia’s Orthodox Church, according to documents seen by Bloomberg and people familiar with the matter.
The list, which still needs to be approved by European governments and could change, also includes family members of President Putin’s spokesperson, Dmitry Peskov, as well a number of senior military personnel. Kirill is a long-time Putin ally and has become one of the most vocal supporters of Russia’s war. Sanctions need the approval of all member states and some Orthodox nations are reluctant to target a senior religious figure, one of the people said.
Kremlin Calls Oil Embargo ‘Double-Edged Sword’ (12:40 p.m.)
The EU’s plans to ban the import of Russian crude oil are a “double-edged sword,” the Kremlin said.
“In seeking to cause us harm, they also pay a high price,” Peskov told reporters on a conference call. “The price of these sanctions for EU citizens will increase every day.”
India Wants Russia to Discount Its Oil (11:39 a.m.)
India is trying to get deeper discounts on Russian oil to compensate for the risk of dealing with the OPEC+ producer as other buyers turn away, according to people with knowledge of the matter.
The South Asian nation is seeking Russian cargoes at less than $70 a barrel on a delivered basis to compensate for additional hurdles, such as securing financing for purchases, in high-level talks between the two countries, said the people.
EU Targets Russia’s Global Oil Sales (11:35 a.m.)
The EU is seeking to go beyond its proposed ban on Russian oil by also targeting Moscow’s ability to sell crude and refined products anywhere in the world.
The bloc is looking at banning European vessels and companies from providing services, including insurance, linked to the transportation of Russian oil globally, according to officials and a draft document seen by Bloomberg.
Oil Rallies on EU Proposal to Phase Out Russian Supply (11:25 a.m.)
Brent futures rose as much as 3.8% to trade near $109 a barrel. The EU’s plan is the most significant energy response from the bloc to the war in Ukraine as it seeks to cut reliance on Moscow. Traders have been keenly focused on just how much the war will affect output from Russia, one of the biggest producers.
Hungary Skeptical of EU Oil Ban (10:45 a.m.)
The EU has yet to resolve Hungary’s concerns over the oil plan, according to Zoltan Kovacs, a spokesman for the Hungarian government. Hungary and Slovakia, which are heavily reliant on Russian energy, will be given until the end of 2023 to comply with sanctions, a year later than other member states, according to people familiar with the matter.
“We see no plan or guarantees in the current proposal to manage even a transition period nor what would guarantee Hungary’s energy security,” Kovacs said by phone on Wednesday.
Hungarian Energy Refiner Prepares for Russian Oil Curb (9:49 a.m.)
Mol, Hungary’s largest refiner, has already taken steps to prepare for EU sanctions on Russian oil, including by stocking up on supplies, its chairman and CEO, Zsolt Hernadi, told Telex news website.
Without access to Russian crude, output would drop by 20% at Mol’s refinery in Hungary and by 30% at its Slovak unit, due to the technological issues in processing other oil types, according to the CEO. Prime Minister Viktor Orban has threatened to block EU sanctions on Russian oil if they hindered Hungarian procurements from Russia.
Ukraine Says Russian Missiles Hit Transport Targets (9:40 a.m.)
Russian missiles targeted transportation infrastructure in eight regions of Ukraine late Tuesday, the General Staff of the Armed Forces said. Missiles hit railway electric grid equipment across the country, wounding several people. Russia is trying to use missiles to stop “new and powerful” weapons arriving to Ukraine from the West, President Volodymyr Zelenskiy’s chief of staff Andriy Yermak said Tuesday on Telegram.
Russia’s defense ministry appeared to acknowledge the strikes, saying its forces destroyed six power sub-stations near railway stations in Podbortsy, Lviv, Volonets, Timkovo and Piatikhatka, Tass news agency reported.
EU Proposes Phasing Out Russian Oil by the Year End (8:54 a..m.)
Hungary and Slovakia, which had been opposed to a swift cut-off of Russian oil, will be granted a longer timeframe — until the end of 2023 — to cut off Russian oil, according to people familiar with the matter.
The move increases the stakes with Moscow as the EU, the single largest consumer of crude and fuel from Russia, seeks to pressure President Vladimir Putin. In 2019, almost two-thirds of the bloc’s crude oil imports came from Russia.
EU Proposes Sanctions on Main Belarus Potash Companies (7:58 a.m)
The move would see the bloc targeting Belaruskali OAO and its export arm, Belarusian Potash Co., according to a person familiar with the matter. The EU is also proposing sanctions on oil refinery Naftan.
All three companies provide significant revenue to President Alexander Lukashenko’s regime and have been previously sanctioned by the U.S. The EU and the U.S. have accused Belarus of aiding Putin in his invasion of Ukraine.
Belarus Calls Unexpected Drills After Lukashenko-Putin Talk (7:28 a.m.)
Belarus announced a “sudden check” of its military forces, the day after President Alexander Lukashenko had a phone call with Russian President Vladimir Putin where they also discussed Ukraine, according to RIA Novosti.
The country’s defense ministry doesn’t say how many troops will take part in the training, only that their size will “grow over time” and will involve moving “significant” amounts of military equipment. The statement doesn’t mention any involvement of Russian forces while claiming the drills threaten neither neighboring countries nor Europe.
Europe Stuck Pursuing Long-Term Gas Contracts (7:04 a.m.)
Europe is finding it next to impossible to put an end to the decades-long natural gas supply contracts it has opposed for years. The war in Ukraine is driving Europe’s energy firms to sign long-term deals to secure alternatives to Russian gas. The continent needs such agreements to fill the gap of losing supplies from Russia, its biggest provider of the fuel.
Europe’s Jobs Market Slows Amid War (6:30 a.m.)
There were fewer help-wanted advertisements in Europe on jobs-search website Indeed in the week to April 22 than there would have been had the pre-war growth trend continued. The survey adds to evidence that the war is weighing on the region’s economic recovery.
Australia Imposes Sanctions on Separatists in Ukraine, Russian Lawmakers (3:22 a.m.)
Australia expanded targeted financial sanctions and travel bans on a further 110 people, including Ukrainian separatists and Russian members of parliament. The measures target 34 senior members of the Russian-backed movements in Donetsk and Luhansk and 76 lawmakers of the state Duma.
Zelenskiy Reports on Mariupol Evacuation (1:01 a.m.)
In his nightly video address, Zelenskiy discussed the evacuation from the besieged steel works in Mariupol. “We finally have the result, the first result, of our evacuation operation,” he said. “It took a lot of effort, long negotiations and various mediations. Today 156 people arrived in Zaporizhzhia.”
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