Ireland will be 'fully exposed' to price hikes from Russian oil and gas embargo, says Ryan
A Shell chemical plant is illuminated in Wesseling, near Cologne. Germany now says it is ready to support a ban but has indicated a phase-in period is necessary. Picture: AP Photo/Martin Meissner, File)
Energy Minister Eamon Ryan has said Ireland will be fully exposed to price hikes if and when an oil and gas embargo is imposed on Russia.
The EU tonight warned member states to prepare for the possibility of a full disruption of Russian gas and oil by the Kremlin.
EU energy ministers met in an emergency meeting in Brussels following Russia’s move to cut gas supplies to Poland and Bulgaria last week.
Both countries were due to make payments to Russian state Gazprom gas company but refused to give into new demands by the Kremlin to convert their payments into a second ruble bank account at Gazprombank.
“All member states have to have plans in place for full disruption," said European Commissioner for Energy Kadri Simson.
"We started planning for this in January, but it requires full solidarity and co-ordination from all 27 members," she told a press conference after the meeting.
The decision by Gazprom to suspend gas supplies to Bulgaria and Poland “marks a turning point in the current crisis, and is a warning that any member state could be next,” said the commissioner.
Paying in rubles is a clear violation of EU sanctions as it provides assets for the sanctioned Russian Central Bank, the Commission says.
Mr Ryan said Ireland has no direct exposure to Russian gas and oil, but this country is fully exposed to the global price hike that will ensue if and when an oil embargo is implemented.
Speaking ahead of the meeting, Mr Ryan said this week is a watershed moment for Europe.
The European Commission is due to propose a sixth sanctions' package which will include targeting Russian oil imports. EU member states will debate the plan in a meeting with EU ambassadors on Wednesday.
Mr Ryan said Ireland is pushing for stronger measures but has to recognise different countries have different needs.
Exceptional measures or dispensations may apply for Hungary and Slovakia which say an oil embargo would be too harmful for their economies.
Mr Ryan said it remains to be seen how far sanction proposals will go. There are calls for extra tariffs to be placed on Russian gas and oil, instead of a full embargo as this may prompt Russia to cut off gas in retaliation.
Germany now says it is ready to support a ban but has indicated a phase-in period is necessary. The country is likely to suffer significantly given the size of its economy and its heavy dependence on Russian fuel.
“After two months of work, I can now say that Germany is not against an oil ban on Russia. Of course, it is a heavy load to bear but we are ready to do that. We have to prepare but time is helpful," German minister for Economic Affairs and Climate Action Robert Habeck told reporters.
Asked if he had a message for Putin he said "Stop the war. And go home."
While it appears the majority of countries will support sanctions of some description, the EU concedes it's impossible to replace all Russian gas with other gas suppliers. Energy ministers also agreed on the need to accelerate the Green Deal, strengthen energy efficiency policies and speed up access to renewable energy.
“We’re pushing for the development of renewables, that’s the best way to wean off Russian oil and gas, said Mr Ryan.
Meanwhile, many energy companies in Europe are due to pay for their Russian gas in mid-May. They face the prospect of a similar fate to that of Bulgaria and Poland. The commission says it will issue further guidance on how to pay for their supply while staying in the parameters of EU sanctions aimed at damaging Russia’s financing of its war against Ukraine.
For now, deliveries to Poland and Bulgaria will come from Greece and Germany.
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