EU to adopt tighter sanctions on Russian oil firms, but no import ban

Brussels — European Union states are set to adopt new sanctions against Russia’s oil majors Rosneft, Transneft and Gazprom Neft, but will continue to buy oil from them, an EU source told Reuters on Monday.

The three companies are already subject to EU restrictions on loans and debt financing. Under the new package to be discussed later on Monday by EU top diplomats, they will also face an investment ban, which is expected to freeze their funding from sources in the EU in new production and exploration projects in all fossil fuels.

But in a sign of EU’s concerns about the impact of sanctions on oil prices and supplies, EU governments insisted on clarifying that the new measures would not prevent EU states and companies from buying oil from the three Russian companies, the source said.

That contrasts with action by the US last week to ban oil imports from Russia, which led to a jump in oil prices. The US does not import as much gas from Russia as the EU does.

Under the new EU sanctions, Rosneft, Transneft and Gazprom Neft would be subjected to a “transaction ban,” the official said, which would block investments and other transfers of financial resources to them.

“We will propose a big ban on new European investments across Russia’s energy sector,” the head of the EU Commission Ursula von der Leyen said on Friday pre-announcing the sanctions but without indicating the targeted companies.

“This ban will cover all investments, technology transfers, financial services, et cetera, for energy exploration and production,” she added.

Many EU governments requested carve outs that would allow EU companies to pay their bills to the Russian majors and continue buying their oil, the source said.

That request has led to a slight delay in the approval of the new sanctions, which had been initially submitted for approval on Sunday.

After some changes to the legal texts to make completely clear that oil can still be purchased from the Russian companies, EU top diplomats are set to discuss and approve the amended proposal later on Monday, the source said.

Reuters