Report: EU may slap duties on Russian oil if embargo fails

MOSCOW, Jun 1 (PRIME) -- The E.U. may slap import duties on Russian oil if the member countries fail to agree on a final oil embargo, the Financial Times reported late on Tuesday quoting sources among the E.U. officials.

Earlier in the day, the leaders of the E.U. countries agreed on a partial embargo on Russian oil, with the ban covering only sea shipments and not pumping through the Druzhba export pipeline.

The Financial Times reported that the exemption was made to comply with the demands of Hungarian Prime Minister Viktor Orban, and it is unclear when Budapest plans to reject cheap pipeline oil from Russia or whether it actually plans to do so. A high-ranking official told the business daily that Hungary’s uncertainty made the E.U. prepare a backup plan to introduce duties on Russian oil.

Hungary will be unable to veto the duties because their introduction requires majority support, not a unanimous vote as with sanctions. The union considers the duties an emergency measure that will come in force only if negotiations with Hungary on the terms of the import ban fall through, the business daily said.

The Financial Times also reported that the E.U. and the U.K. have coordinated a ban on insurance of ships that transport Russian oil. Britain’s decision will close the Lloyd's of London insurance market for Russia, and will limit the possibilities for crude exports.

Greece and Cyprus agreed with the insurance ban only after the U.K. coordinated it. The British government declined to comment, but sources told the Financial Times that they will announce the decision soon. Another source told the Financial Times that the G7 countries were also working on a ban of the insurance of ships that carry Russian oil, but the measure would not come in force in the next six months.

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