Russia oil ban will stress euro-area economic activity

Significance

European leaders found a compromise with Hungary which had blocked a full ban on Russian oil as part of the sixth round of EU sanctions that European Commission President Ursula von der Leyen proposed on May 4. EU energy users may have to bear higher energy costs for longer as a result.

Impacts

• The EU could fund infrastructure changes in Hungary, the Czech Republic and Slovakia to meet a fixed deadline to end Russian imports.
• The EU targets a drastic reduction in its dependence on Russian gas, but agreeing a full ban will take much more time.
• Banning Russian oil and steadily cutting Russian gas should in time improve EU energy security, and speed up the clean energy transition.