EU admits it will take five years to stop using Kremlin’s oil and gas

THE president of the European Commission, Ursula von der Leyen, has admitted it will take the EU five years to wean itself off Russian oil and gas as the Kremlin continues its war on Ukraine.

In a blow to hawks calling for an immediate embargo, Ms Von der Leyen suggested that it will be impossible to phase out Kremlin fossil fuels before 2027 without endangering “reliable, secure and affordable” energy supplies to the Continent. The timescale is three years earlier than originally proposed but still short of what was demanded by Kyiv, which has argued that Russia is financing its invasion of Ukraine with money from energy exports.

Meanwhile, analysts at Germany’s largest bank warned that shutting Russia out of the Swift global payments system poses an economic “danger” to the world. Deutsche Bank published a research report yesterday arguing that “banning Russia from Swift will complicate trade and amplify jitters”. The report came days after Germany was accused of resisting efforts to lock Russia’s largest bank out of the system.

Deutsche Bank said yesterday it would wind down its business in Russia after facing criticism from some investors and politicians for its ongoing ties to Putin’s regime. “There won’t be any new business in Russia,” the lender said.

Ms Von der Leyen said that her energy proposals will be outlined by the end of May, with measures for reducing the impact of higher energy bills for consumers by the end of the month.

The US has put in place an embargo on Russian oil and the UK has vowed to phase out all purchases by the end of this year. But in Europe, where more than a quarter of oil imports and two fifths of gas come from Russia, leaders have backed away from such a ban.

For its part, the Kremlin has also reassured the Continent that it is happy to carry on doing business and has no plans to renege on gas contracts, with pipeline flows through Ukraine continuing despite the raging conflict.

Critics said this leaves a gaping hole in what are otherwise tough sanctions on Russia, which has been blocked from international payment systems, excluded from debt markets and denied access to its foreign currency reserves.

The reluctance among EU leaders to push ahead with an all-out embargo helped to calm oil and gas prices yesterday as fears that it would trigger a rush for alternative supplies petered out.

Moscow also excluded energy from export bans it announced in retaliation for the crushing sanctions imposed on the Russian economy by the West as punishment for the invasion of Ukraine.

Hungary, which gets the majority of its oil and gas from Russia, had lobbied against an embargo. Germany and the Netherlands had also raised doubts about an all-out ban.

Brent crude traded at $110 a barrel yesterday, up from Thursday, but far below the high of $130.50 on Tuesday.