EU nations are poised to enact new sanctions against Moscow’s major oil companies Rosneft, Transneft and Gazprom Neft. This announcement will deal a significant blow to Putin’s invasion of Ukraine. Russian oil and gas is the country’s largest export and is responsible for a major chunk of the economy.
However, the EU will not completely sanction these companies, but rather will continue to purchase oil and gas from them, according to Reuters.
The EU is unlikely to completely turn off the taps on Russian gas, as it relies on Moscow for about 40 percent of its energy needs.
The three Russian companies have already been subject to EU restrictions on loans and debt financing.
However, top EU diplomats are also considering striking these companies with an investment ban, which will freeze their assets from EU sources in new production and exploration projects in all fossil fuels.
In an effort to reduce concerns in the bloc over the impact that these new sanctions would have, the EU insisted that the new measures would not bar countries and companies from purchasing oil and gas from these Russian companies.
These actions were less severe than the ones taken by the US and the UK.
Last week, the US announced a ban on oil imported from Russia, a move that sent gas prices soaring.
Meanwhile, in the UK, which only depends on Russia for about six percent of its energy, Prime Minister Boris Johnson is meeting with leaders of the UK’s offshore oil and gas industry to discuss how to free the UK of Russian gas.
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The UK previously announced its plans to phase out Russian energy entirely by the end of 2022, Business Secretary Kwasi Kwarteng confirmed.
An EU official speaking to Reuters noted that Rosneft, Transneft and Gazprom Neft would only receive a “transaction ban”.
Under these restrictions, these companies would face blocked investments and other transfers of financial resources to them.
On Friday, the head of the EU Commission Ursula von der Leyen pre-announced the sanctions saying: “We will propose a big ban on new European investments across Russia’s energy sector.