The EU is nearing an agreement on a boycott of Russian oil. This is an important step against war. Even countries that are heavily dependent on Russia, such as Hungary, should realize that a rethink can no longer be avoided.
It is possible to do without Russian oil, and Germany is even developing alternative supply concepts for the East German refinery in Schwedt.
Sometimes things can suddenly happen quickly in Europe. For weeks, Germany hesitated to take a clear position on energy purchases from Russia and arms deliveries to Ukraine. In the past week, however, there has been a rethink. The Bundestag approved the delivery of heavy weapons to defend Ukraine. And in the federal government, the conviction prevailed that an import stop for Russian oil is manageable and desirable.
At a ministerial meeting in Brussels on Monday, the Green Economics Minister Robert Habeck called on all EU countries to “quickly and drastically reduce supplies of fossil fuels from Russia”. In recent weeks, Germany has recognized the unacceptable dilemma of its dependence on Russian energy supplies. Under Habeck’s guidance, alternative suppliers and delivery routes were examined and some have already been set up. According to government figures, the share of Russian oil deliveries has already fallen from 35 to 12 percent.
Oil embargo tears a large hole in Russia’s war chest
Thanks to Germany’s concession, the EU can now start implementing a planned oil embargo by the end of the year, which could be announced on Wednesday. This is great progress. While Russian natural gas is harder to replace and therefore gives a lot to talk about politically, oil is also very important for financing Russia’s treasury and thus warfare. According to the research institute, since the beginning of the war on February 24 Crea EUR 27 billion for natural gas supplies and EUR 20 billion for oil supplies flowed to Moscow from EU countries.
The EU is therefore using the right lever. With an oil embargo, it can make war financing more difficult and increase the economic costs of the war for Russia; that could increase the pressure for a ceasefire. At the same time, the EU states are easing their own conscience because they are less likely to be accused of financing wars.
Resistance within the EU can be resolved
Yet it is not so far. States that are particularly heavily dependent on Russian oil and do not have direct access to the sea, such as Slovakia or Hungary, are opposed to this. Budapest even threatened a veto. However, the EU should not let this deter it. One of its core competences is to develop compromises and compensation mechanisms for member countries with special interests that enable their approval. In the context of the Ukraine war, solidarity with the neighboring countries of Central and Eastern Europe is particularly important. A solution such as longer transition periods should be possible and worthwhile.
It is true that the EU can circumvent a Hungarian veto relatively easily by having the member states order individual delivery stops against Russia. But a unified EU stance would send a strong signal to the Kremlin: Because of the attack on Ukraine, it has lost its most important customer for its most important export product.
The war will cost the Europeans one way or another
However, it is also time for states like Hungary and Slovakia to realize that they have backed the wrong horse with their high dependence on Russian energy. Russia is not a reliable partner. Dealing with a state that is invading a neighboring country and systematically committing war crimes there throws every business partner into intolerable ethical conflicts. These countries should follow the German example and quickly look around for alternative suppliers and delivery routes.
As Habeck openly admitted for Germany on Monday, this will not be possible without difficulties and higher costs for consumers and companies. Oil and fuel prices will rise. But a strategy that turns a blind eye to the political turning point triggered by the Russian attack in Europe is also costly and risky.