Reuters announced EU plans to phase out gas, oil and coal from Russia
The European Union intends to stop buying Russian energy resources. This decision was made in connection with the situation in Ukraine, the agency said. Reuters with reference to the draft declaration prepared for the summit of the leaders of the organization in Versailles.
Refusal of Russia’s resources
The document reveals the EU’s plans to phase out gas, oil and coal from Russia. It is noted that the events in Ukraine are “a tectonic shift in European history.” For the European Union, the current moment is also called a turning point, since Russia is the largest supplier of resources for the organization. The country supplies the EU with 40 percent of its gas, more than a quarter of its total oil and about half of its coal.
Faced with increasing instability, strategic competition and security threats, we have decided to take more responsibility for our security and take further decisive steps to strengthen our European sovereignty, reduce our dependency and develop a new growth and investment model for 2030
EU member states depend on Russian resources to varying degrees, so the leaders did not set a deadline for refusing supplies. Germany, Italy, Hungary and Austria experience the greatest need for gas from Russia.
Earlier, the United States decided to abandon Russian resources. The corresponding decree was signed by the head of state Joe Biden on March 8.
Options for Action Plans
On March 9, the European Commission (EC) proposed to the EU countries a plan to completely phase out coal, oil and gas from Russia. It is going to be implemented “long before 2030”. According to a document called REPower EU, Europe is going to diversify gas supplies by increasing imports of liquefied natural gas (LNG) and pipelines from non-Russian suppliers.
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The International Energy Agency (IEA) has also proposed to the European Union a plan to reduce dependence on Russian gas. The program consists of ten points, which involve the rejection of new contracts with Russia and a green transition in the energy sector.
Possible consequences
Member of the European Parliament Thierry Marian believes that the EU is in for a catastrophe if it refuses to import gas from Russia. By imposing sanctions against Moscow, Europe is acting emotionally and does not know what other measures can be added to the existing ones.
The Hill said that the US refusal of Russian oil threatens the country with huge financial losses. In addition, this decision will entail a significant increase in prices, “at least until other energy supplies come from somewhere.”
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The rejection of Russian resources will lead to catastrophic consequences, Russian Deputy Prime Minister Alexander Novak warned. He suggested that this decision will cause a surge in fuel prices. Novak admitted that the cost of a barrel of oil could reach $300.
Stanislav Mitrakhovich, an expert from the National Energy Security Fund (NESF) and the Financial University under the Government of Russia, said that the EU’s rejection of Russian oil would reduce production. He is sure that Europe will need several years “to abandon us without shock.”
The cost of gas and oil
On March 7, the price of Brent oil updated a record high and broke the peak values of 2012. The historical maximum price for this fuel was registered in 2008, when the cost of a barrel exceeded $143.
130dollars per barrel
cost of Brent oil
In addition, on March 7, the price of gas in Europe, according to the London Stock Exchange ICE, exceeded 3.8 thousand dollars. Experts explained such figures by the low level of occupancy of European underground storage facilities, limited supply from suppliers and high demand for LNG in Asia.
The Russian Foreign Ministry attributed the rise in gas prices to the abandonment of the Russian Nord Stream 2 gas pipeline. This opinion was made by the director of the department of economic cooperation of the Foreign Ministry Dmitry Birichevsky. He stressed that the gas pipeline has become “a hostage of artificial linkage with other political subjects.”
Sanctions against Russia
On February 24, Russian President Vladimir Putin announced a special military operation to protect Donbass. After that, most Western countries reacted to Russia’s actions with tough sanctions, including economic ones, against Russian individuals and legal entities.
On March 9, the head of the European Commission, Ursula von der Leyen, announced that the European Union would impose sanctions on 160 Russian businessmen and parliamentarians. “We continue to tighten our sanctions network,” she stressed.
At the same time, the UN called for the abandonment of sanctions that harm the Russians. This opinion was made by the representative of the UN Secretary General Stephane Dujarric. “This is our position,” he stressed.
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