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Over 40 percent of the EU's natural gas and 25 percent of its oil consumption come from Russia. Germany has been holding on to its rejection of an abrupt ban.
The European Union is under mounting pressure from Washington to ban Russian energy imports as European leaders and U.S. President Joe Biden are set to meet and discuss deterrence measures against Russia at a summit on Thursday. However, member states of the bloc have not reached an agreement yet on whether a ban would be slapped on Russian energy in the EU.
"Europe's supply of energy for heating, mobility, electricity and industry currently cannot be secured in any other way," German Chancellor Olaf Scholz said at an EU leaders' summit in France earlier this month.
Over 40 percent of the EU's natural gas and 25 percent of its oil consumption come from Russia. Germany has been holding on to its rejection of an abrupt ban. The country's Foreign Minister Annalena Baerbock argued that the proposed oil embargo was a "question of how much we depend on oil" from Russia.
Other German leaders echoed Baerbock's concern. Minister for Economic Affairs and Climate Action Robert Habeck warned on Saturday that his country would not have enough gas to heat homes and keep industry going next winter if it does not obtain more gas and if deliveries from Russia are cut off.
Other EU members, such as Austria and Finland, have also warned against hastily banning energy imports from Russia. The sanctions imposed by the United States and Britain on Russia's energy sector in response to Russia's military operation in Ukraine have already sent shockwaves across the world's energy markets.
"The implications of a potential loss of Russian oil exports to global markets cannot be understated," the International Energy Agency said in a report released last week.
"But to do so from 1 day to next would be to plunge our country + whole of Europe into recession. 100s of 1000s of jobs would be at risk, entire industries could be on the brink.” pic.twitter.com/2wsGjgiFZY
According to the agency, Russia's oil production disruptions could lead to the biggest supply crisis in decades. The prospect of an EU ban on Russian oil imports has already stirred the global energy market. On Monday, the crude price jumped more than 7 percent to US$115 a barrel as European diplomats were debating a possible ban on Russian energy imports.
Surging oil prices have pushed transport companies to the brink of bankruptcy in Spain, where truck drivers started a national strike a week ago. As the strike enters its second week, the disruptions to transport are causing food shortages, and certain areas in northern Spain are even at the risk of running out of tap water.
The knock-on effect of energy price spikes has sent the prices of many other items skyrocketing in Germany. The German Farmers' Association said that the price of fertilizer is five times that of the same period last year. Association President Joachim Rukwied said he was convinced that food prices would climb because farmers and food processors would have to pass the inflated costs on to customers. The European Central Bank has already lowered its projection for economic growth in the eurozone to 3.7 percent this year.
There has been a consensus among European countries that the EU's dependence on Russian fossil fuels should be reduced, if not ended altogether. The EU unveiled a plan on March 8 to reduce energy imports from Russia. According to the plan called REPowerEU, the EU is striving for independence from Russian fossil fuels well before 2030.
By diversifying gas supplies, speeding up the rollout of renewable energy, and replacing gas in heating and power generation, the EU is attempting to reduce its demand for Russian gas by two-thirds before 2030. In a post on social media, European Commission President Ursula von der Leyen proposed that the EU should phase out Russian fossil fuels by 2027.