Russia is one of the EU’s major trading partners. More broadly than just fuel, both the EU’s imports to and exports from Russia have decreased in the past decade. In 2021, Russia was Europe’s fifth-largest trading partner for EU exports of goods, after the US, UK, China, and Switzerland. And it was the third largest for EU imports of goods, after China and the US.
Some European countries are likely to be affected worse than others. Finland, Latvia, and Bulgaria are more dependent than Germany on Russian gas, and Italy is not far behind. While Poland is highly dependent on Russian gas, its government has courageously called for a boycott. More broadly, European leaders have become increasingly worried about the long-term costs of carbon energy and its implications for the planet.
Europe’s moral standing depends on it cutting back Russian oil and gas imports as fast as possible. But to be credible, the process must be sustainable. Swift action will be needed to minimize the economic fallout in Europe. And while one hopes that a boycott of Russian energy will bring peace sooner rather than later, Europe should be prepared for a longerterm scenario.
The European Union has announced a ban on the import of seaborne Russian oil. The embargo on tanker deliveries does not apply to oil sent through the Druzhba pipeline, branches of which transit through Russia, Ukraine and Belarus to markets in Eastern and Central Europe.
Land-locked Hungary, Slovakia and the Czech Republic are heavily reliant on Druzhba deliveries. Hungary, for instance, gets 65 percent of its oil from the pipeline, and it has refused to endorse the total ban demanded by other EU states.
About two-thirds of Europe’s Russian oil supply makes its way to the continent by ship, but EU officials say that by the end of the year they will manage to block 90 percent of imports because Germany and Poland have pledged to stop drawing on pipeline supplies. Bloomberg estimates that the embargo will be a $22 billion blow to Russia. Russian oil accounts for 30 percent of Europe’s entire supply, and its elimination is provoking tensions within the EU. In Hungary, it would cost €500 million to €700 million to convert refineries to handle non-Russian supplies.
