While European Union officials are still agreeing on a gradual phase-out of Russian oil imports, which could be submitted as a proposal to EU countries as early as next week, it remains unclear how strictly the EU will dare to restrict President Vladimir Putin's main source of revenue.

Oil revenues are crucial to fueling the war in Ukraine, but diplomats who want to deal a devastating blow to the Kremlin fear that European actions will weaken hesitant EU countries - Germany and Hungary.

For the economic powerhouse of Germany, an immediate and total EU ban on oil is still not acceptable. Berlin has indicated to other EU capitals that it is prepared to consider a reduction in Russian oil - even if it cannot yet abandon gas imports - but only under specific conditions currently being discussed with the European Commission. (...)

(...) According to IFO Institute data, Europe is hesitant about whether to stop importing oil from Russia. "On the one hand, by waiting, the EU would gain more time to better prepare by organizing alternative energy sources, reducing demand, and optimizing energy flow logistics within and between EU countries," says IFO researcher Karen Pittel. "On the other hand, an oil embargo should not be delayed either, as it would allow Russia to find other buyers while continuing to generate income from the EU." Delaying would reduce the motivation of EU countries to prepare for the interruption of Russian energy supplies.

"In principle, high energy prices are important in the current situation because they are a signal to private households and businesses that they should consume less energy," says K. Pittel. "However, low-income households need help to overcome particularly sharp increases in energy costs." The government should help those who cannot help themselves, for example, by making payments to low-income households. For businesses, easy access to loans could help ease the burden while creating an incentive to use as little state support as possible. Short-time work schemes could also help overcome disruptions in the labour market.