The European Union needs to cut off financing for the Russian war in Ukraine by introducing sanctions on oil exports, Ireland’s foreign minister has said.

Simon Coveney is in Luxembourg for a meeting of the EU foreign affairs council, where further sanctions against Moscow will be discussed.

Speaking as he arrived for the meeting, Mr Coveney said the EU is spending hundreds of millions of euros on Russian oil.

He said: “Ireland has maintained for quite some time that we need to take a maximalist approach to sanctions to offer the strongest deterrent to the continuation of this war and brutality.

“The European Union is spending hundreds of millions of euros importing oil from Russia. That is certainly contributing to financing this war

“We know that is very difficult for some member states and we have to keep a united position across the EU.

“We now have coal as part of the sanctions package. We know that the commission is working on a future package that we hope we can see soon that will involve oil as well.

“The European Union is spending hundreds of millions of euros importing oil from Russia. That is certainly contributing to financing this war.”

“In our view we need to cut off that financing of war even though it creates huge challenges and problems for the EU to solve together.

“We will see what the commission says. They are now working on ensuring that oil is part of the next sanctions package. We believe the sooner that can happen the better.”

EU foreign ministers are expected to take stock of EU support to Ukraine and discuss the geopolitical impact of the war on the wider region.

They will also meet the foreign ministers of Iceland and Norway on co-ordination in response to the war and will hold an informal exchange with International Criminal Court prosecutor Karim Khan and Ukrainian prosecutor general Iryna Venediktova.

Source: https://www.standard.co.uk/news/uk/russia-luxembourg-moscow-ukraine-international-criminal-court-b993659.html

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These fossil-fuel exports have enabled Russia’s invasion of Ukraine and its extreme violence against unarmed civilians and civilian infrastructure. Russian President Vladimir Putin apparently believes that no one can stand up to him because of the naked power that he can exert through energy markets. If the Europeans resist too much, he will cut off their gas. If the rest of the world cuts back on their purchases from Russia, the price of oil will rise, causing economic difficulties everywhere.

But Putin underestimated the horror and fear that his invasion would create, particularly in Europe. Even worse for him, the United States, Europe and their allies have all the tools needed to end Russia’s energy leverage. Importers around the world are shunning Russian oil and gas. Europe, certainly, will never again risk its national security on Russian energy imports. Consequently, Russia will soon be finished as a major player in world energy markets.

Putin’s war of aggression has killed thousands of civilians and displaced about ten million, including more than four million who have fled the country. With Russian forces repeatedly shelling and firing missiles at civilian areas, 13 million Ukrainians are at risk of bombardment. In Mariupol and elsewhere, Putin’s forces have targeted buildings where civilians were sheltering, even where the word “children” was clearly marked or a red cross was painted on the roof. In the eyes of the world, these are war crimes, pure and simple.

Nowhere is the shock and revulsion felt as intensely as in Europe. The entire EU has come together, taking in millions of Ukrainian refugees and seeking to help Ukraine in as many other ways as possible. Every atrocity committed by Russian forces generates more support for Ukraine among European leaders and publics alike.

Some EU countries are already de facto boycotting Russian oil. According to TankerTrackers.com, in February, Denmark imported just over 7.5 million barrels of crude oil from Russia by ship. But in the first 27 days of March, Denmark imported no Russian crude whatsoever. Sweden, Finland and other countries also reported big declines in Russian crude imported by tanker. And there are increasing signs that Germany and other countries will step up to lead a full and immediate embargo on imports of Russian oil by tanker into the EU.

There is also discussion of paying for Russian gas and pipeline oil into escrow accounts that are effectively frozen, to ensure the euro proceeds cannot be used by Russia to buy weapons anywhere in the world. Putin attempted to get ahead of this development by demanding payment for gas only in rubles, but the EU has rebuffed this as a breach of contract. Germany and Austria are preparing to ration the use of gas.

Putin and some energy traders apparently think that it will be easy for Russia to switch from European oil deliveries to Asian markets. But they seem to have forgotten a key lesson of the Iran oil sanctions. Should the US, the EU, the United Kingdom, and Norway implement sanctions that prohibit all forms of maritime insurance for tankers carrying Russian oil and refined products, most of the world’s tanker fleets would withdraw from the Russian market.

The Russians have their own tankers, of course, but their fleet is too small to move more than about one million barrels per day, particularly because a lot of the crude would need to be hauled from Murmansk, the Baltic Sea, or the Black Sea all the way to Asia. Some renegade operators may attempt to enter the business, but these activities would be tracked carefully, and ship owners, charterers, and captains would most likely face personal US and EU sanctions. Ukraine has already indicated it will pursue all possible remedies against anyone complicit in the financing of war crimes.

Once the world adjusts to living with much less Russian energy, there will be no going back. No European in their right mind wants nuclear-armed Russia to have the free cash flow that its hydrocarbon exports currently provide, because that money will allow Putin (or his successors) to rearm and become even more aggressive, perhaps attacking NATO countries next time. There is no such thing as “cheap” Russian oil and gas.

Russian fossil fuels are funding an awful war. The killing must stop. And the world must learn to live without Russian energy products.

Simon Johnson, a former chief economist at the International Monetary Fund, is a professor at MIT’s Sloan School of Management and a co-chair of the COVID-19 Policy Alliance. Oleg Ustenko has been economic adviser to Ukrainian President Volodymyr Zelensky since May 2019. Copyright: Project Syndicate, 2022.

Source: http://jordantimes.com/opinion/simon-johnson-and-oleg-ustenko/russia-finished-major-energy-power

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WASHINGTON — Russia typically brushes off new U.S. sanctions. Not this time.

The Trump administration announcement of export restrictions in response to accusations Moscow used a nerve agent to poison a former Russian spy in Britain sent the ruble tumbling to a two-year low and drew a stern warning from its prime minister. While the initial sanctions may have a limited impact, a second batch expected within months could hit the Russian economy much harder and send already tense relations into a tailspin.

If sanctions are expanded even further to target Russia’s top state-controlled banks, freezing their dollar transactions — as proposed under legislation introduced in the Senate this month — it would amount to a “declaration of economic war,” Russian Prime Minister Dmitry Medvedev said Friday.

So much for President Donald Trump’s hopes for better relations with Moscow.

On his watch, the U.S. has imposed a slew of sanctions on Russia for human rights abuses, meddling in the U.S. election and Russian military aggression in Ukraine and Syria. For the most part, they have punished Russian officials and associates of President Vladimir Putin rather than targeting broad economic sectors.

In 2014, both the U.S. and European Union introduced sanctions that restricted Russia’s access to global financial markets and to equipment for new energy projects. Those measures were punishing, but the sanctions announced by the Trump administration this past week could be even worse.

The restrictions were triggered under U.S. law on chemical weapons following a formal U.S. determination that Russia used the Novichok nerve agent to poison former Russian spy Sergei Skripal and his daughter in the English city of Salisbury in March.

The first tranche, due to take effect Aug. 22, will deny export licenses to Russia for the purchase of many items with national security implications. Existing sanctions already prohibit the export of most military and security-related items, but now the ban will be extended to goods such as gas turbine engines, electronics and calibration equipment that were previously allowed on a case-by-case basis. The State Department said it could potentially affect hundreds of millions of dollars in trade.

“It’s a significant step, but not an overwhelming one,” said Daniel Fried, a veteran State Department official who served as chief U.S. coordinator for sanctions policy until he retired last year.

The penny could drop, though, in three months’ time.

Russia has 90 days to “provide assurances” that it will not use chemical weapons in the future and allow inspections. If Russia does not comply, Trump will be obligated to impose a second set of sanctions, applying restrictions on at least three from a menu of options: opposing multilateral bank assistance to Russia, broad restrictions on exports and imports, downgrading diplomatic relations, prohibiting air carrier landing rights and barring U.S. banks from making loans to the Russian government. That could do significantly more economic harm and have a lasting, destabilizing effect on the currency and stock markets.

Senior Russian lawmaker Vyacheslav Nikonov said a second set of sanctions may be inevitable and predicted it would pitch relations to new low. The relationship is already routinely described as at its worst since the Cold War.

“They are demanding that Russia (accepts) an obligation to refrain from any further use of chemical and bacteriological weapons, which amounts to our acknowledgement that we have used it. But we haven’t,” he said.

Things could get even worse if the Defending American Security from Kremlin Aggression Act, which a bipartisan group of senators introduced Aug. 2, makes its way through Congress. It would target Russia’s state-controlled banks and freeze their operations in dollars, which would deal a heavy blow to the Russian economy. The prospects for the legislation becoming law remain uncertain.

Medvedev warned the U.S. that such a move would cross a red line and would warrant a Russian response by economic, political or “other means” he did not specify. His tough tone was a departure from past nonchalance from Putin and his lieutenants over the impact of Western sanctions on the Russian economy.

Vladimir Vasilyev, a researcher with the Institute of the U.S. and Canada, a government-funded Moscow think tank, said U.S.-Russian ties were now approaching “the point of no return with no prospect for improvement” in sight.

Fried said that in addition to uncertainty over sanctions, Moscow’s strong response this time is likely also being fueled by larger inconsistencies in U.S. policy toward Russia. While Trump has hankered for closer ties with Putin, the government he leads has been far less accommodating.

“Whatever deal the Russians had or thought they had or thought they could get from President Donald Trump, they’re not able to get it from Trump’s administration,” Fried said.

The State Department denied inconsistency in U.S. policy and maintained that sanctions were aimed at encouraging improved behavior from Russia. “We’d like to have a better relationship with the Russian government, recognizing that we have a lot of areas of mutual concern,” spokeswoman Heather Nauert said.

Congress has a less diplomatic view.

Trump has repeatedly come under fire from lawmakers, including from his own Republican Party, for his conciliatory statements on Russia, particularly at his joint press conference with Putin at their summit in Helsinki last month where he appeared to doubt U.S. intelligence conclusions that Russia intervened in the 2016 election.

Rep. Ed Royce, chairman of the House Foreign Affairs Committee, was among lawmakers who welcomed the U.S. sanctions announced this week. “It’s critical that we use every tool at our disposal to confront Putin’s use of chemical weapons, as well as his efforts to undermine our democracy,” the Republican from California said.

___

Isachenkov reported from Moscow.

Source: https://www.washingtonpost.com/business/newest-us-sanctions-against-russia-hit-an-economic-nerve/2018/08/13/c701fd48-9eae-11e8-a3dd-2a1991f075d5_story.html?noredirect=on

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