Insurance Is the Real Weapon in Europe’s Russian Oil Embargo

While the ban on imports of Russian crude is a potent political symbol, losing European insurance on shipments is more powerful economically

European Union leaders took a big step in the economic fight against Moscow over its invasion of Ukraine by agreeing to block 90% of Russian oil imports by year-end. The embargo faced opposition from countries highly dependent on Russian crude, especially Hungary. Photo: Olivier Matthys/Associated Press
By
Rochelle Toplensky

The European Union’s partial embargo on Russian oil sounds impressive, but it is the bloc’s insurance ban on crude shipments that packs the most punch.

After weeks of political wrangling, all 27 countries in the bloc finally agreed to ban shipments of Russian crude and refined fuels overnight on Monday. Hungary’s Prime Minister Viktor Orban—an EU bugbear and pal of Russian President Vladimir Putin—had been the holdout. The phased-in embargo is forecast to affect about 90% of the bloc’s total Russian crude imports by the end of the year, with Hungary, Slovakia and the Czech Republic expected to use an exemption for pipeline supplies.

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