Poland urges EU unity to slap sanctions on Russian energy

Lorne Cook
Associated Press

Brussels – Poland urged its European Union partners on Monday to unite and impose sweeping sanctions on Russia’s oil and natural gas sectors over the war in Ukraine, and not to cave in to pressure to pay for their gas in Russian rubles.

The appeal came as EU ministers met in Brussels to discuss their response to Russia’s decision last week to cut gas supplies to Bulgaria and Poland. Energy giant Gazprom says the two countries failed to pay their bills in April.

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“We will call for immediate sanctions on Russian oil and gas. This is the next, and urgent, and absolute step,” Polish Climate and Environment Minister Anna Moskwa said. “We already have coal. Now it’s time for oil, and (the) second step is for gas. The best option is take them all together.”

The EU has hit Russian officials, oligarchs, banks, companies and other organizations with rafts of sanctions since Moscow ordered an invasion of Ukraine in February. The commission is working on a sixth round of measures, possibly including oil restrictions, and could announce them this week.

The measures would have to be approved by the member countries, which could take several days.

In a move last week branded in Europe as “blackmail,” Russian energy giant Gazprom cut supplies to Bulgaria and Poland. It came after Russian President Vladimir Putin said that “unfriendly” countries must start paying for gas in rubles, Russia’s currency.

Bulgaria and Poland have refused to do so, like most EU countries. More Gazprom bills are due on May 20, and the bloc is wary that Russia might turn off more taps then. Russia rejects the claims of blackmail.

Both countries informed the ministers that consumers and industry face no immediate supply risk.

EU Energy Commissioner Kadri Simson warned that Gazprom’s action “clearly shows that they are not reliable suppliers and that means all the member states have to have plans in place for full disruption” to their supplies.

The 27-nation EU imports around 40% of the gas it consumes from Russia. But some member countries, notably Hungary and Slovakia, are more heavily dependent on Russian supplies than others, and support for a gradual phasing in of an oil embargo is emerging.

Germany believes it could cope if supplies of Russian oil were cut off by Moscow. Economy Minister Robert Habeck said that Russian oil now accounts for 12% of total imports, down from 35% before the war, and most of it goes to the Schwedt refinery near Berlin.

“Germany is not against an oil ban from Russia. Of course it is a heavy load to bear, but we are ready to do that,” Habeck told reporters. He said that a few more weeks or months to find oil transporting ships, and to better prepare harbors and pipelines would be useful.

“Time is helpful but I think other countries have bigger problems, and as I have asked for solidarity or understanding of the German situation, I am also of course willing to understand the maybe more difficult situation for other countries,” he said.

The bulk of Monday’s meeting focused on shoring up gas supplies and not giving in to Putin’s demand that companies pay for gas in rubles. Around 97% of European contracts have been concluded in euros or dollars.

The EU’s executive branch, the European Commission, has warned that companies ceding to pressure to convert euros to rubles through two accounts at Gazprombank would be in contravention of the bloc’s sanctions.

French Ecological Transition Minister Barbara Pompili, whose country holds the EU’s rotating presidency until the end of next month, said all countries agreed “that we should implement the sanctions and respect the contracts. And the contracts clearly say payment in euros.”

Despite the pressure, Europe does have some leverage in the dispute since it pays Russia $400 million a day for gas, a huge dent in Moscow’s coffers should it opt for a complete cutoff.

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Frank Jordans in Berlin and Mike Corder in The Hague contributed to this report.