This ban will apply to seaborne imports only. Technical details have yet to be finalized, such as when the ban comes into force. A spokesperson for the European Commission said a ban on seaborne crude imports will come into force within six months and on oil products in about eight months, following formal adoption of the ban by EU member country ambassadors, expected to take place later this week. No time frame was given for how long pipeline imports will be exempt.

No time frame was given for how long pipeline imports will be exempt from the ban. (UBS)

The European Union imported 2.2mbpd of crude and slightly more than 1.1mbpd of oil products from Russia last year (seaborne and pipeline), with crude imports via the Druzhba pipeline accounting for slightly more than 0.7mbpd of the total. Of those 0.7mbpd, nearly 0.5mbpd went to Germany and Poland. Both countries indicated to cut those imports to zero by the end of this year. Hungary, Slovakia, and the Czech Republic imported about 0.2mbpd of Russian crude last year, a small fraction of total imports of 3.3mbpd.

Russian crude imports are likely to stay supported in the near term, with a phased reduction of Russian barrels by Europe offset by strong demand for discounted Russian barrels from India and China. We believe the near-term oil price direction will be driven more strongly by the reopening of the Chinese economy and summer travel activity in the Northern Hemisphere.
Source: UBS