Today's D Brief: EU's war on Russian oil; Ukraine's grain problem; Canada's tightening gun laws; TGM's big opening; And a bit more.
The EU just escalated its economic war against Russia’s “war machine.” European Union leaders said Monday evening that the 27-nation bloc will ban sea-borne Russian oil, which affects about two-thirds of Moscow’s estimated $10 billion in monthly oil exports to Europe. The ban will rise to about 90% of Russian oil imports by the end of the year, as Germany and Poland gradually turn away from those sources by the end of the calendar year to further punish Russia for invading its democratic neighbor Ukraine in late-February.
Notable: The new sanctions exempt Russian oil delivered via pipeline. This “temporary” exemption was designed to allow the landlocked nations of Hungary, Slovakia, and the Czech Republic to continue their access to oil via Russia’s Druzhba (“friendship”) line, which has been in operation since 1964 and is the world’s longest oil pipeline, stretching nearly 3,500 miles.
“Two-thirds of the oil that we have in the European Union is sea-borne, and one-third is pipeline,” European Commission President Ursula von der Leyen said when announcing the sanctions, which is the bloc’s sixth iteration, and includes removing Russia’s largest bank (Sberbank) from the Swift financial system, and banning another three Russian state-run media outlets from broadcasting across the EU. These new sanctions will “immediately” cover those “two-thirds of oil imports from Russia, cutting a huge source of financing for its war machine,” European Council chief Charles Michel tweeted Monday. “Maximum pressure on Russia to end the war,” he added.
Regarding the roughly 10% that’s exempt, von der Leyen and Michel would like to close that pipeline-delivered gap as soon as possible; but it’s unclear when that might come, since it involves the consent of Hungary’s increasingly autocratic leader. “This is a topic we will come back to and where we will still have to work on,” she said.
Backup plan: Croatia says it’s ready to ship oil to Hungary via a line known as the Adriatic, should Russia cut the supply via Druzhba in the months ahead, according to Reuters. But in the meantime, Hungary’s refineries “will have to be updated because the Russian oil is of a different quality than the Adriatic pipeline oil,” von der Leyen said. “So it is good to have a certain amount of time and activity to fulfill all these criteria so that Hungary can really switch off the Russian oil.”
Bigger picture: The EU’s new sanctions “could fan global inflation, already running at its highest rate in decades in major economies, and exacerbate a shortage of fuels in poorer regions that will compete with Europe to import oil,” the Wall Street Journal reports. Already, “Europe’s race to stock up on oil from other producers has driven the price of high-quality crudes produced from West Africa to Azerbaijan to levels not seen for years.”
Dollars and sense: The sanctions could provide an opening for new diesel sales from the U.S., India, and the Middle East, since more cars run on diesel in Europe than the U.S., according to the Journal. They could also hurt Russian efforts to transport its oil abroad, since the new EU measures include a ban on insuring Russian vessels by EU companies. CNBC has a bit more on what’s known so far.
Russian reax: “They hate us all! The basis for these decisions is hatred for Russia, for Russians and for all its inhabitants,” Prime Minister Dmitry Medvedev wrote on Telegram.
Next up for the EU: Figuring out how to get an alleged 22 million tons of Ukrainian grain out to markets. It remains stuck in bins and on hoppers because of Russia’s naval blockade of the Black Sea. Establishing some kind of reconstruction financing for Ukraine is also on the EU’s docket, as well as finding ways to pivot toward renewable energy sources.
Milley: “Right now, the sea lanes are blocked by mines and the Russian navy,” America’s top military officer, Joint Chiefs Chairman Army Gen. Mark Milley, said Tuesday in London. “In order to open up those sea lanes would require a very significant military effort” and “would be a high-risk military operation.” Defense News has more, while traveling with Milley in the UK.
- “US Army signs deal to backfill Stingers sent to Ukraine,” also via Defense News, reporting Friday;
- “Key Ukraine city 'divided in half',” Agence France-Presse reports Tuesday, referring to the eastern city of Severodonetsk;
- “Oil Jumps as EU Commits to Partial Russian Crude Ban,” via the Wall Street Journal, reporting Tuesday;
- “Russians feel little economic pain now, long-term outlook darkens,” via Reuters, reporting Tuesday;
- “Eurozone inflation hits record 8.1%,” via Financial Times, reporting Tuesday;
- “Biden to discuss inflation crisis with Fed Chair Powell on Tuesday,” via CNN, reporting Monday;
- And “After a Bumper 2021, Companies Might Struggle to Increase Profits,” via the New York Times, reporting Tuesday.
From Defense One
Russian Officials Talk About Unplugging the Country from the Internet. But Is That Possible? // Patrick Tucker: For all its efforts, the Kremlin may still lack the capability to close off news from beyond the borders.
Defense Business Brief // Marcus Weisgerber: Defense Business Brief: More ‘Top Gun’ thoughts; B-21 first flight delayed; NRO awards big imagery deals, and more.
New Zealand Prime Minister Jacinda Ardern is visiting the White House today. New Zealand is one of several countries that tightened its gun control laws after a mass shooting—in this case, the 2019 massacre at a mosque in Christchurch. Canada did so in 1989; Germany in 2002; and Norway joined last year, according to the New York Times, reporting last week. “Only the United States, whose rate and severity of mass shootings is without parallel outside of conflict zones, has so consistently refused to answer those events with tightened gun laws,” the Times writes.
America just experienced 14 more mass shootings over the Memorial Day weekend, according to the Gun Violence Archive, whose latest tragic updates were reported Monday by NBC News.
New: Canada may be about to tighten its gun control laws yet again. And those were already much stricter than the few in place across the U.S., the New York Times reported Monday. If passed, the new bill would put a “national freeze” on the sale of handguns; the Washington Post has more, here.
- “A Timeline of Failed Attempts to Address U.S. Gun Violence,” also via the NYT, reporting last week;
- And “Uvalde grieves, says goodbyes at visitations, funerals,” via AP, reporting Tuesday from Texas.
National Guard to Taiwan? The Pentagon is “proactively planning cooperation” between the U.S. National Guard and the Taiwanese military, Taiwan’s president said today. In a meeting with U.S. Sen. Tammy Duckworth, D-Ill., in Taiwan’s capital, Tsai Ing-wen said the island is looking forward “to closer and deeper Taiwan-U.S. cooperation on matters of regional security,” Reuters reported. Duckworth is one of the main sponsors of legislation to promote that cooperation.
The meeting comes a day after China sent 30 military aircraft toward the island, which is part of a regular campaign; and Taiwan scrambled jets and put defense systems on alert in response, the Associated Press reported.
And lastly: 59-year-old actor Tom Cruise just notched his most profitable opening movie weekend ever, as “Top Gun: Maverick” collected over $150 million in its first few days across some 4,700 theaters—breaking a Memorial Day record, according to the Los Angeles Times. His previous best weekend was back in 2005 with “War of the Worlds” at $64 million, Fortune reports.
The weekend showings now place TGM as among the most profitable films of the ongoing pandemic era, behind “Spider-Man: No Way Home” (at $260 million) and “Doctor Strange in the Multiverse of Madness” (with $187 million), according to Variety.