Russia-Ukraine War: Ban On Russian Oil, Disconnecting Sberbank And Personal Sanctions | OSW

EUR/USD Faces Resistance at 1.0774 Amid Inflation and Stagflation Concerns

At night on 30 May, the European Council managed to reach an agreement on the sixth package of sanctions against Russia. Although the details of the arrangements are yet to be made public, media reports show that the leaders of the EU Member States have agreed to impose restrictions on the import of Russian oil, with a temporary exemption for oil imported to the EU via oil pipelines (this derogation was primarily demanded by Hungary). The ban is to be introduced within six months of the EU Council decision on this matter entering into force. However, conclusions reached at the summit envisage that the European Council will address the issue of temporary derogation for oil supplied via pipeline as soon as possible. The European Council summit also saw agreement on the imposition of an embargo on the import of Russian petroleum products within eight months. The European Council also obliged the EU Council to adopt a new sanctions package without delay, ensuring a properly functioning EU single market, fair competition, solidarity among member states and a level playing field, including with regard to reducing the dependence on Russian fossil fuels.

According to the announcements made by President of the European Council Charles Michel and President of the European Commission Ursula von der Leyen, the embargo on oil imports from Russia by sea will affect more than two thirds of Russian gas supplies to the EU. Representatives of the EU authorities added that, taking into account the discontinuation of oil imports by the end of 2022 announced by Poland and Germany, total oil supplies from Russia to the EU may decrease by as much as 90% by the end of the year.

In addition, under the current sanctions package, three more Russian banks are to be disconnected from the Worldwide Interbank Financial Telecommunication (SWIFT), including the largest state-owned bank, Sberbank. According to media reports, the state-owned Rosselkhozbank (sixth in terms of assets) and the private Moscow Credit Bank (seventh) will be added to this list.

Furthermore, personal sanctions will be imposed on a further 58 people, including Kirill, the Patriarch of Moscow and all Rus’, Alina Kabaeva (who is believed to be President Vladimir Putin’s former life partner) and individuals responsible for waging the war in Ukraine. In addition, three Russian TV channels are to be included in the sanctions lists. They will not be able to broadcast their signal to the territory of the EU, including via satellite.

On 31 May, Gazprom suspended gas supplies to the Dutch energy company GasTerra which had refused to pay for Russian gas in rubles. Under the contract, which is valid until 1 October 2022, the company should still receive 2 billion m3 of gas. The Danish company Ørsted, which intends to pay for the Russian gas in euros on 31 May, is also preparing for supplies to be cut off. According to the agreement which is binding until 2030, the company should receive 1.8 billion m3 of gas annually from Russia.

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EUR/USD Faces Resistance at 1.0774 Amid Inflation and Stagflation Concerns

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The Centre is a Polish state analytical center based in Warsaw. It was established in 1990 as a public institution financed from the central administration budget.

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