Economic War with Russia Hots up as EU Decides to Curtail Oil Supplies

European Union (EU) leaders agreed on Monday to cut down more than two-thirds of Russian oil imports into the bloc by the end of the current year.

The decision was part of new sanctions on Russia worked out at a summit focused on helping Ukraine. The EU gets about 40% of its natural gas and 25% of its oil from Russia.

EU Council President Charles Michel said leaders also agreed to provide Ukraine with a €9 billion ($9.7 billion) tranche of assistance to support Ukraine’s economy. It was unclear whether the money would come in grants or loans.

“Tonight, the European Council agreed a sixth package of sanctions. It will allow a ban on oil imports from Russia. The sanctions will immediately impact 75% of Russian oil imports. And by the end of the year, 90% of the Russian oil imported in Europe will be banned,” Michel tweeted.

The new package of sanctions will also include an asset freeze and travel ban on individuals. Additionally, Russia's biggest bank, Sberbank, will be excluded from SWIFT, the major global system for financial transfers from which the EU previously banned several smaller Russian banks. Three big Russian state-owned broadcasters will be prevented from distributing their content in the EU.

“We want to stop Russia's war machine,” Michel said. He added that the new sanctions, which needed the support of all 27 EU members, will be legally endorsed by June 1.

The embargo covers Russian oil brought in by sea, allowing a temporary exemption for imports delivered by pipeline, a move that was crucial to bring landlocked Hungary on board a decision that required consensus.

Hungary gets more than 60% of its oil from Russia and depends on crude that comes through the Soviet-era Druzhba pipeline. It gets 85% of its natural gas from Russia. Prime minister Viktor Orban had made clear he could support the new sanctions only if his country's oil supply security was guaranteed.

The remaining 10% of Russian oil will be temporarily exempt from the embargo so that landlocked Hungary, Slovakia and the Czech Republic, all connected to the southern leg of the Druzhba pipeline, have access. Budapest also won reassurances from other leaders that emergency measures would apply "in case of sudden interruptions of supply."

The EU had already imposed five previous rounds of sanctions on Russia over its invasion of Ukraine. It has targeted more than 1,000 people individually, including Russian President Vladimir Putin and top government officials as well as pro-Kremlin oligarchs, banks, the coal sector and more.

The sixth package of measures announced May 4 had been held up by concerns over oil supplies.