The Real Reason Behind The EU's Drive To Embargo Russian Oil

[Midnight]

The Real Reason Behind The EU's Drive To Embargo Russian Oil


SATURDAY, MAY 14, 2022 - 07:00 AM

Authored by Tom Luongo via Gold, Goats, 'n Guns blog,



This week the European Union is expected to announce a complete import ban on Russian oil. Hungary, in its first real act of defiance, is threatening to veto this; Germany, after some hemming and hawing, has finally decided it can survive such a ban.



Assuming Hungary’s objections are eventually overcome, at first blush this looks like yet another energy “own goal” by the people obsessed with soccer. The U.S. has already issued this ban.



Because European industry is heavily dependent on Russian oil and gas, the conventional wisdom is that the EU Commission is just petulant and incompetent.



Are they petulant? Yes. Incompetent? Possibly? But only if you think in conventional terms of doing the right thing for their people. What is clear to any serious observer of EU politics is that they are not interested in what their people have to say or want.







Theirs is an agenda which will brook no opposition, even if it means destroying its own economy to bring a rival to its knees.



That said, I sincerely doubt there will be a “buyers embargo” on natural gas because there is no viable substitute for it.



Hungary is using the need for unanimous consent within the European Council to block any ‘gas ban’ in any new economic sanctions package. There are at least three other countries which are happy Hungary is willing to suffer Brussels’ wrath.



But banning Russian oil, on the other hand, is different.



So, it is interesting that Hungary would do this, given they import no oil from Russia. {Ed. this is wrong, Hungary imports 65% of its oil through the Druzhba pipeline} This veto was predicted by me the morning after the Hungarians overwhelmingly rejected George Soros’s anti-Viktor Orban coalition and handed it an ignominious defeat.



Hungary, on the other hand, has energy independence from Brussels by having contracted directly with Gazprom for natural gas via Turkstream’s train that goes into Serbia and Hungary. This should give you some context as to why the EU is trying to sanction Serbia and cut off the flows of that pipeline where it crosses EU territory in Bulgaria.



With a fiscally, monetarily (they are not on the euro) and energy independent Hungary there is little argument for them staying in the EU if Brussels is going to treat them as second class members. Orban and his government have been resolute in their refusal to get involved in the Russia/Ukraine conflict even though there has been serious pressure applied by NATO.



It is almost as if Orban and the Hungarians are now daring the EU to advance Article 7 procedures to kick them out. The problem with that is, if they do, it would begin the fracturing of the EU.



So, what is more likely to happen now is Hungary will use this veto to get the EU to back off on the ‘rule-of-law’ violations which are justifying cutting off Hungary from its EU budget distributions. The horse trade here should be obvious.



Because Brussels and their behind-the-scenes backers absolutely want this ban on Russian oil as much as the U.S. and the UK want it. It is part of their long-term strategy to bleed Russia out, after turning Ukraine into Afghanistan 2.0.



And it is in the differences between the oil industry and the natural gas industry where they think they can achieve this goal.

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