EU agree on 6th sanction package: Russia to lose $22 billion annually over oil embargo, Sberbank removed from SWIFT

The leaders of the EU nations have agreed upon the sixth package of sanctions against Russia, Charles Michel, the president of the European Council, wrote on his Twitter. The new restrictions will cut down ⅔ of the Russian oil exports.

"Agreement to ban export of Russian oil to the EU. This immediately covers more than two thirds of oil imports from Russia, cutting a huge source of financing for its war machine," he tweeted.

Russia exports ⅔ of its oil to the EU by sea. The remaining part is delivered via the Druzhba pipeline. The new sanctions package excluded the Druzhba pipeline from the oil embargo and only imposed sanctions on crude shipped to the EU by tanker vessels due to Hungary’s stance. The oil embargo will not affect Hungary, says Viktor Orbán, the country’s PM.

Russia may lose up to $22 billion of yearly income due to the oil embargo, says Bloomberg. The sea imports ban will cost Russia $10 billion each year, forcing the country to sell its oil to Asia instead, where it’s already changing hands at about $34 a barrel cheaper than the price of Brent futures. Cutting down the northern branch of the Druzhba pipeline serving Germany and Poland will deprive Russia of $12 more billion each year. The ban would temporarily exclude pipeline oil to satisfy Hungary which had been blocking an embargo for the past month as it sought assurances its energy supplies wouldn’t be disrupted. The southern branch of Druzhba serving Hungary, Czechia and Slovakia grants Russia $6 billion of yearly revenue.

The new sanctions package includes other measures, too. Sberbank, Russia’s largest state-owned bank, will be removed from SWIFT. Three Russian broadcasters will be banned in the EU. The ban also implies the sanctioning of dozens of military personnel, including those deemed responsible for reported war crimes in Bucha, as well as companies providing equipment, supplies and services to the Russian armed forces.

The EU will also sanction Russia’s Patriarch Kirill (Gundyaev), as well as Alina Kabaeva, ex-Olympic champion, for being “closely associated” with Vladimir Putin, says Bloomberg.

Additionally, the EU will grant Ukraine €9 billion. “EUCO will continue helping Ukraine with its immediate liquidity needs, together with G7. EUCO is ready to grant Ukraine €9 billion. Strong and concrete support to Ukraine’s reconstruction,” Michel wrote on his Twitter.

The new ban will “effectively cut around 90% of oil imports from Russia to the EU by the end of the year,” says Ursula von der Leyen, president of the European Commission.

A ban for Russians to buy European real estate was excluded from the sanctions package under the pressure from the Republic of Cyprus. The ban would not affect Russian nationals who also have EU or Swiss citizenship, says Bloomberg.