EU to Propose Phasing Out Russian Oil by the End of the Year

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People familiar with the matter say that the European Union will propose a ban on Russian oil by the end of the year.

People who asked not to be identified said that the EU will push for more banks from Russia and Belarus to be cut off from the international payment system. Sberbank, Russia's largest financial institution, was hit with sanctions by the U.S. and U.K.

There is a ban on Russian oil imports in Europe.

The ambassadors of the bloc will meet next week to make a decision on the new sanctions. The proposed measures, which would make up the EU's sixth package of sanctions since Russia invaded Ukraine in February, have yet to be formally put forward and could change before that happens.

EU sanctions require the backing of all 27 member states to be adopted and several countries, such as Hungary, have long resisted measures targeting Russian oil. Germany, another holdout, has signaled its approval for a gradual ban.

The EU, the single largest consumer of crude and fuel from Russia, is trying to pressure Putin over his war, and it comes as tensions are already high over gas supplies. Almost two-thirds of the bloc's crude oil imports came from Russia.

Price caps, special payment mechanisms and tariffs are some of the options that have been considered to slash Russia's oil revenue. It would be included in the package for its role in aiding the Russian invasion, which included acting as a staging ground for troops at the start of the offensive.

The EU and Moscow are at odds over how to pay for gas imports. The EU said that a mechanism demanded by Russia to pay for supplies in rubles would be in violation of the bloc's sanctions. Russia will stop sending gas to countries that don't comply.

Europe is starting to respond to Russia's threat.

Poland and Bulgaria have been cut off from the Russian gas market because they failed to abide by the new terms.

The EU has imported 44 billion euros of fossil fuels from Russia since it invaded Ukraine, according to the Centre for Research on Energy and Clean Air.

The new sanctions package will include restrictions on cloud-based services, as well as real-estate purchases, according to the people. Military officials, tycoons and their associates could also be included in the listings, as they are suspected of being responsible for war crimes committed by Russian troops in Ukraine.

Some member states want to tighten restrictions on maritime trade and ports as part of the package.

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