The European Union is banning Russian energy imports in response to the war in Ukraine. The bloc agreed this week to stop imports of coal. Since Russia invaded Ukraine in February, governments have responded with strict trade restrictions and financial sanctions. The EU's energy trade with Russia has been at the center of many discussions. The bloc is under pressure to stop its imports of Russian oil and gas, which would cause a huge financial blow to Moscow. It could cause the EU to go into a full-blown recession, as energy prices spiral and hit already-squeezed households. The problem with oil and gas is that the two sides are too dependent on one another for either to fully turn off the spigots. Russia and the EU are interdependent when it comes to energy. One of Russia's most valuable exports is oil. The country is the third-largest producer of crude and ships it all over the globe, but it used to. Around 30% of the EU's needs are covered by Russia's 3.1 million barrels of oil per day. Russia supplies more oil to the bloc than Iraq, Nigeria and Saudi Arabia put together. The main destinations are Germany and the Netherlands. A quarter of the oil arrives by pipeline. Most oil arrives by tanker, and it is this supply that commodity traders have self-sanctioned, that is, the oil is available but has no, or very few, buyers. Analysts said that the pain from an oil embargo would be greater than from coal or natural gas. Russia's revenues would be hit harder if oil imports were banned. It is likely that an oil embargo will come sooner than an import ban on natural gas, according to a commodities analyst at Commerzbank. There are reasons that a ban may not happen in the near future. The EU gets about one-third of its oil from Russia, but crude is the region's biggest energy import. It makes up 70% of all energy imports.
Oil
The EU imports of crude oil.
Natural gas is a bigger problem. The EU gets 40% of its natural gas needs from Russia, according to EU data.
Some countries in the bloc are more dependent on supplies than others. Germany gets 70% of its gas from Russia.
The EU's energy crisis has been going on for years. The year ended with record prices. Christopher Dembik, head of macroeconomics at Saxo Bank, said that natural gas in Europe is more expensive than oil.
The price of natural gas can be compared to crude oil by converting it to a barrels-of-oil equivalent. Natural gas prices in the Netherlands are half of what they were a year ago. They are double the current price of crude oil.
Some energy exports from Russia. The graph is based on Russia's export statistics and partner country import statistics.
Coal makes up 4% of fossil-fuel imports from Russia and less than 4% of Russian export revenue. Russia depends less on the EU for its coal exports than on any other fossil fuel.
The impact on Europe will be worse even though the ban on Russian coal exports has had a minimal effect.
The sanctions are a double-edged sword. Russian coal exports are worth an estimated 4 billion euros per year, and there is no easy replacement for Russian coal in Europe's power mix.
European consumers should expect high prices for the rest of the year as coal and gas are essential to meet the continent's power demand, he said.
Solid fuel imports by the EU. The Eurostat.
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