Europe Ready to Quit Russian Oil Imports

At the end of March, Poland announced it would halt imports of Russian oil by the end of 2022, and the European Commission followed suit, proposing a ban on 4 May. 

European countries have declared their intentions to eliminate dependance on Russian oil. Photo: iStock.com / SGV

Both from technical and economic points of view, resigning from imports of Russian oil for European countries seems to be much more achievable than in the case of natural gas. The market for the former is more competitive than the market for the latter. This is true both for the production and transport of these resources. On the other hand, the revenues from oil exports are more important for the Russian state budget than those from gas.   

Until recently, however, Poland was the only country in our region that openly declared abandoning dependence on Russian oil by the end of this year. On 1 May, Germany made a similar declaration, followed shortly by the European Commission, which, on 4 May, proposed a total ban on Russian oil imports. 

To what extent do 3Seas countries depend on Russian oil?  

The level of reliance on Russian oil has varied among countries in the past decade. In 2010 it was Lithuania that was the most dependent on Russian oil. Since that time, this Baltic state has reduced its dependence, cutting the share of Russian oil in its total domestic needs from 92% to 71%.

During the same period, Slovakia marginally increased its dependence from 79% to 80%. Slovakia is currently the most dependent on Russian oil, both in our region and the entire European Union. Apart from those two, Poland and Bulgaria take more than half of their total oil consumption from Russia.  

The countries in the southwest part of our region, namely Austria, Croatia, and Slovenia, are, on the other hand, the least dependent on Russian oil. According to Eurostat data, Slovenia and Austria rely much more on the re-export of oil from Italy and Germany, and the most essential oil supplier to Croatia is Azerbaijan. Romania itself is an oil producer, and in 2020, more than 35% of its oil consumption came from domestic production.  

Quitting oil imports

The share of imports from Russia on total Croatian oil consumption has never been exceptionally high. Still, it is the country that most significantly reduced its reliance on this source since 2010. It fell from 37% to 7%. In the last ten years, Hungary and Czechia also significantly reduced their reliance on Russian oil. Slovenia, Estonia, and Austria are on the opposite side of this scale. They all seriously increased their dependence on Russian oil, but it seems it reached a considerable level (42%) only in Estonia.  

It is evident that the level of dependence on Russian oil is not the only deciding factor in whether halting imports from Russia is feasible or not. Much depends on other factors such as the size of total demand, access to alternative sources, development of technical infrastructure, and local refinery capacity.

The governments in the region will consider all of these factors before making any decisions, but the European Commission’s recent declarations will undoubtedly accelerate this process.

Much will depend on political will and determination. There is enough of the latter in most countries in our region, so other countries will likely soon follow the examples set by Poland and Germany.

Mateusz Walewski

Chief economist of BGK (Bank Gospodarstwa Krajowego) since 2018. Previously worked among other for PwC and CASE - Center for Social and Economic Research. Participant of numerous research projects and advisory services for the private sector and governments across Central and Eastern Europe. Member of the Team of Strategic Advisors to the Prime Minister of Poland in years 2008-2010. Author of publications and consultancy reports on macroeconomics, labor market and social policy issues. A graduate of the University of Warsaw and the University of Sussex.

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