The EU has now turned its focus to phasing out Russian oil as it seeks to increase the weight of sanctions on Russia.

Brussels is proposing a full ban on Russian oil, beginning with a phase-out of crude oil within six months and refined products by the end of the year.

European Commission President Ursula von der Leyen commented that the EU will maximise pressure on Russia, while at the same time minimising collateral damage to the EU and its partners around the globe.

Ireland has low direct reliance on Russian oil

Ireland imports all of its oil demand either as crude oil or refined products. Over one-third of oil imports are crude oil while almost two-thirds are refined products.

Ireland has one oil refinery located at Whitegate, Co Cork. It can process up to 75,000 barrels of crude oil per day.

Whitegate’s refined product output is equivalent to 30-40% of Ireland’s inland demand.

SEAI figures shows that in 2018, 45% of crude oil Imports came from Norway, 19% from the US,16% from the UK, and 20% from other sources.

UK key supplier

Ireland has a strong reliance on the UK for refined oil products, accounting for almost two-thirds of imports in 2018.

While direct imports from Russia have grown in recent years, they are insignificant. The UK has already confirmed that it is to phase out the import of Russian oil in response to Russia’s war in Ukraine. The UK is Europe’s second biggest oil producer after Norway. Russian imports account for 8% of total UK oil demand.

Notwithstanding Ireland’s apparent low direct reliance on Russian oil, cutting off Russian oil imports could have a much wider rebound effect into the world economy than sanctions to date.

If all 27 EU leaders agree to the ban, which is a challenge in itself, implementation will need to be carefully choreographed to have maximum impact on Russia while not destabilising global oil markets.

The price of Brent crude oil increased by 3.4% to $108.54/barrel by mid-morning Wednesday following the announcement.

Russian oil accounts for 44% of Russian exports and 17% of federal government revenue through taxation.

In addition, the EU on Wednesday proposed to remove Sberbank, Russia’s largest bank, from the SWIFT international payment system.

In addition, sanctions will hit two other banks and three state-owned broadcasters that will be banned from broadcasting in the EU.