INVESTIGATION: Russian Oil, the Final Hurdle: Why the Baltic States Are Demanding the Embargo That Brussels Is Rejecting

Why Tallinn, Riga, and Vilnius Speak with Authority

The Baltic states have no lessons to learn from the major European countries regarding dependence on Russian oil: they eliminated it themselves, long before the war forced them to do so. Estonia had developed its own oil shale industry and reduced its imports of Russian energy as early as the late 2000s. Lithuania has completed the process of cutting off its electricity imports from the Russian-Belarusian grid and intends to join the European electricity grid, ENTSO-E, by 2025. Latvia has actively diversified its energy supplies. These countries have proven that cutting ties is possible, that the costs are manageable, and that energy independence from Russia is achievable with political will.

Their call for a total oil embargo is therefore that of countries that have done their homework and are asking their European partners to do theirs. This is not idealism—it is hard-won experience. And their voice carries all the more weight because they are the most geographically exposed to the Russian threat. As The Guardian noted on June 27, 2026, NATO officials fear that Russia may be planning “provocations” in the Baltic states. The countries directly facing this threat are also the ones that best understand the link between Russian oil revenues and Russian military capability.

Their Four-Step Plan

The Baltic plan for an oil embargo is not an emotional improvisation. It includes concrete elements: a clearly defined transition period that cannot be extended indefinitely; a European solidarity mechanism to help the most dependent countries finance their alternatives; infrastructure investments to enable Poland, Slovakia, and Hungary to connect their refineries to alternative supply routes (the Baltic Sea and the Adriatic Sea via the TAL pipeline); and economic compensation for industries that would incur significant transition costs.

This plan is realistic. It has been presented to European authorities on several occasions. It has been studied, commented on, and annotated—and ultimately set aside in favor of yet another extension of the exemptions. The reason is not technical: solutions exist. The reason is political: certain governments prefer the ease of the status quo to the political effort required for the transition.

I have read the public version of this Baltic plan. It is serious, detailed, and economically sound. The fact that it has been repeated for two years without producing the expected results is not the fault of the Baltic states. It is the fault of the countries that have the means to make the transition and choose not to do so.

Budapest Between Moscow and Brussels: A Deliberate Balance

To understand why the total oil embargo remains stalled, one must understand Viktor Orbán’s Hungary. This country is in a unique position within the EU: it is a member state that deliberately maintains economic and political ties with Moscow that other members consider incompatible with European solidarity. MOL, Hungary’s national oil company, relies heavily on Russian oil for its main refinery. The Hungarian government has negotiated long-term supply agreements with Rosneft and other sanctioned Russian entities. These agreements are presented as an economic necessity.

But behind this economic necessity lies a political choice. Orbán has maintained close ties with Putin well after the war began. He has traveled to Moscow. He has blocked sanctions packages. He has advocated for negotiations with Russia on terms unacceptable to Ukraine. This stance is not a consequence of Hungary’s energy dependencies—it is their cause. Orbán has chosen Moscow as a strategic partner, and he uses economic dependencies as a defensive argument to justify that choice.

Slovakia: A More Discreet but Equally Problematic Follower

While Orbán’s Hungary is the most widely publicized case, Slovakia plays a similar role—more discreet but just as problematic. The Slovnaft refinery, which supplies a large part of the Slovak economy, is a subsidiary of MOL and depends on the same oil flows via Druzhba. The Slovak government has followed Budapest’s lead in requesting exemptions and has aligned itself with Budapest’s positions on several rounds of sanctions.

The Slovak case illustrates a troubling European dynamic: governments that could act independently choose to hide behind more vocal allies to avoid diplomatic pressure. Bratislava benefits from the protections secured by Budapest without bearing the political cost. It is a version of the tragedy of the commons applied to sanctions: everyone tries to minimize their individual effort, hoping that others will shoulder the burden. The collective result is inadequacy.

I don’t want to be unfair to Slovakia—it’s a small country with real economic constraints. But the problem isn’t the existence of those constraints; it’s the refusal to address them with the urgency the situation demands. Four years after the war began, “transition periods” are no longer valid arguments.

Alternative routes exist and are underutilized

The central argument of opponents to the oil embargo is that there is no immediate alternative to Druzhba oil for Central European refineries. This argument deserves serious consideration—and it does not hold up to serious scrutiny. Several alternative routes exist and have underutilized capacity.

The TAL (Trans Alpine Pipeline), which connects the port of Trieste in Italy to Bavaria, has the potential to transport oil to Central and Eastern Europe via extensions or additional transport agreements. The port of Gdańsk in Poland, on the Baltic Sea, has tanker-receiving infrastructure that would allow substitute oil to be transported to Polish refineries and, with investments in pipelines, further south. The JANAF pipeline in Croatia, which connects the Adriatic port of Omišalj to Hungary, has theoretically sufficient capacity to partially offset Druzhba’s flows if expansion investments were made.

The Missing Investments: A Political Choice, Not Fate

What is missing to make these alternatives fully operational is not unavailable technology or non-existent resources. It is targeted investments—in unloading terminals, pipeline extensions, and storage capacity—that could have been planned and financed starting in 2022 if the political will had been there. These investments come at a real cost—in the range of several billion euros—which is perfectly manageable for economies the size of Germany, Austria, or even Hungary, with adequate European support.

By way of comparison: Germany invested tens of billions in the development of LNG terminals after the cutoff of Russian gas. It demonstrated that rapid energy transitions are possible when the political will exists. There is no structural reason why a similar transition isn’t feasible for oil via Druzhba. There are political reasons. And these reasons deserve to be called out for what they are.

The “there is no alternative” argument is the oldest argument in the world for justifying the status quo. Germany proved in 2022 that it could find alternatives to Russian gas within a few months when it had no choice. Why doesn’t the same sense of urgency apply to oil?

From Oil Pumps to Ballistic Missiles: The Funding Chain

To understand why the oil embargo is so crucial, we must trace the link between oil revenues and Russian military spending. The Russian federal budget derives a significant portion of its revenue from taxes and royalties on the production and export of hydrocarbons. These revenues are directly incorporated into a budget whose top priority, since 2022, has been funding the war. The Russian government has announced plans to increase its military spending by an additional 4 to 5 trillion rubles in 2026, according to Bloomberg. These funds must be financed—and oil revenues contribute directly to this.

The chain is therefore direct: oil purchased by Hungarian refineries → foreign currency revenue for Rosneft → taxes and royalties paid to the Russian state → military budget → purchase of missiles, drones, and ammunition. This chain is not a theoretical construct. It is the normal functioning of an oil economy integrated into a state tax system. When Europe buys Russian oil, it finances this chain. That is a fact.

The Destroyed Ukrainian Refineries and the Terrible Irony

There is a cruel irony in the current situation: while some EU member states are buying Russian oil via Druzhba, Russian forces are bombing Ukrainian refineries. Ukraine has lost a large portion of its refining capacity due to Russian strikes. It now imports a portion of its petroleum products. These imports come at a considerable economic cost to a country already exhausted by war. This is not just a shocking asymmetry—it is a strategic absurdity that EU member states persisting in buying Russian oil should be ashamed to perpetuate.

In other words: Europe is buying the Russian oil that Russia uses to produce the weapons that are destroying Ukrainian refineries. The circularity of this situation should be unbearable for anyone who claims to support Ukraine. It is unbearable for the Baltic states. It should be unbearable for everyone.

I cannot write this paragraph without a deep sense of anger. Ukraine is losing its refineries to Russian bombs. Europe is buying more Russian oil. And some European capitals are surprised that Ukrainians sometimes feel betrayed by their allies. Spot the mistake.

Routes to Bypass Oil Sanctions

Beyond the Druzhba pipeline—for which exemptions are official and documented—there are less visible routes through which Russian oil reaches European markets despite sanctions on seaborne oil. The most well-documented mechanism is transshipment: Russian oil is loaded onto tankers in Russia, transferred to ports in third countries (Turkey, the United Arab Emirates, India), sometimes mixed with oil from other sources, and then re-exported to buyers who can no longer or no longer wish to purchase directly from Russia.

This mechanism is well-known, well-documented, and has been partially targeted by successive rounds of sanctions. Yet it remains active. Investigative journalists and organizations such as CREA (Center for Research on Energy and Clean Air) have documented several of these routes. The 21st sanctions package attempts to improve monitoring and strengthen restrictions, but without effective secondary sanctions against third countries that facilitate transshipment, the results remain limited.

The “ghost fleet”: untraceable ships

A particularly concerning phenomenon documented since 2022 is the development of a “ghost fleet” of Russian tankers: ships whose flag, insurance, and owners are opaque, which operate outside standard tracking systems, and which enable the shipment of Russian oil to buyers without complying with the price cap imposed by the G7. This fleet has grown considerably in size since the 2022 sanctions and represents a major means of circumvention.

The European Union, in its successive rounds of sanctions, has attempted to target this fleet by designating specific vessels and prohibiting its nationals from insuring them or providing them with services. But the list of designated vessels always lags behind reality—new vessels are being added to the ghost fleet faster than they can be designated. Once again, this is a regulatory arms race in which Russia has the advantage of rapid adaptation and Europe is struggling to keep pace.

The Russian ghost fleet is an international scandal that few people know about. Hundreds of tankers sailing under flags of convenience, without insurance or transparency, to transport sanctioned oil to complicit buyers. This is organized smuggling on an industrial scale. And Europe has still not found an adequate response.

An Honest Assessment of the Economic Costs

A total embargo on Russian oil would have real economic costs. It would be dishonest to deny them. For the countries directly affected—Hungary, Slovakia, and the Czech Republic—the transition involves investments in infrastructure, costs to adapt refineries to different grades of crude oil, and possibly temporary increases in prices at the pump. According to various analyses, these costs are estimated at several billion euros spread over a two- to three-year transition period.

But these costs must be viewed in context. The European Union, through its Cohesion Fund and solidarity mechanisms, has the resources to support this transition. The frozen Russian assets—300 billion euros—could legitimately be used to finance part of this transition. And above all, the costs of a two- to three-year oil transition are incomparable to the costs of continuing a war that destroys tens of billions of euros worth of Ukrainian infrastructure every year and perpetuates strategic insecurity for all of Europe.

The gas precedent argument: Europe has already done it

The best response to objections about the costs of an oil embargo is to look back at recent history. In 2022, Europe cut off the vast majority of its imports of Russian natural gas in less than a year—a dependence far deeper and more structural than its current dependence on oil. The cost was real: painful energy inflation, businesses under pressure, and households struggling with high bills. But Europe survived. It adapted its supply chains. And by 2026, its dependence on Russian gas is marginal compared to what it once was.

If this isn’t possible for oil by 2026, it’s solely because certain governments have decided not to treat it with the same sense of urgency they applied to gas. This is a political choice masquerading as a technical constraint. The Baltic states, which did everything on their own without the massive aid that larger countries were able to mobilize, are living proof of this.

The argument about transition costs really baffles me. We found hundreds of billions to help industries during the 2022 gas crisis. We found hundreds of billions for post-COVID recovery plans. To cut off Russian oil and end this war sooner, suddenly there’s no money? I don’t believe it for a second.

Analysis of the Effects on the War Budget

A total European oil embargo would not eliminate Russian oil revenues—China and India would continue to buy, at discounted prices. But it would significantly reduce the total volume exported at acceptable prices and exacerbate the discount Moscow already accepts on its Asian sales. According to analyses by CREA and the Kiel Institute, a complete European embargo on Russian oil (both seaborne and land-based) would reduce Russian oil revenues by an additional 15 to 25% compared to current levels following the partial sanctions.

Against the backdrop of a budget deficit already exceeding $80 billion and military spending rising by 4–5 trillion rubles, an additional 15–25% reduction in oil revenues would place considerable budgetary pressure on Moscow. It would not cause an immediate collapse—but it would force even more painful trade-offs between military and social spending. It would accelerate the structural depletion that the Kiel Institute has already documented.

The Effect on the Duration of the War

The question that many do not ask directly enough is that of the embargo’s potential impact on the duration of the war. If increased economic pressure accelerates the depletion of Russian resources—forcing Putin to choose sooner between the war and domestic economic stability—then every week gained in the potential duration of the conflict translates into lives saved, Ukrainian infrastructure preserved, and reduced reconstruction costs. The economic analysis of the oil embargo must factor in this parameter—which is often overlooked in analyses that focus solely on European transition costs.

The Baltic states, which have been making this intuitive calculation since 2022, have drawn a clear conclusion: the cost of the embargo is lower than the cost of continuing the war. This is not idealism. It is a perfectly rational strategic calculation—and that is why they are pressing Brussels with unwavering persistence.

When I weigh the cost of a total oil embargo against the cost of each additional month of war, I don’t see how hesitation is justifiable. Ukraine is shedding blood. Europe is spouting economic arguments. There is something deeply unbalanced about this exchange.

Poland and Finland: Joining Forces

The Baltic states’ call for a total oil embargo is not an isolated one. Poland, which borders Ukraine and Russia, has cut off its own imports via the Druzhba pipeline and supports the call for a general embargo. Finland, following its accession to NATO in 2023, has adopted an increasingly firm stance on sanctions and supports the Baltic approach to oil. These countries form a cohesive northeastern bloc within the EU that understands the Russian threat on a visceral level and acts accordingly.

Joining these voices, somewhat unexpectedly, are certain representatives of the European Parliament and human rights NGOs who have publicly supported a total embargo. Parliamentary resolutions have been adopted to this effect. While this parliamentary support is not enough to force a decision—sanctions are decided by the Council of the EU, not the Parliament—it does create growing political pressure on hesitant governments.

The European Commission: Between Will and Ability

The European Commission finds itself in an uncomfortable position on the issue of the oil embargo. Its technical staff and some of its political leaders believe, in private, that a total embargo would be the most effective measure to accelerate Russia’s economic collapse. But the Commission cannot impose sanctions without the unanimous agreement of the member states in the Council. And as long as Hungary and Slovakia block the move, unanimity is impossible.

This institutional constraint—the unanimity rule for sanctions—is one of the major structural flaws in the EU’s foreign policy. It gives each member state an absolute veto over decisions crucial to collective security. Reforming this rule—moving toward a qualified majority on sanctions issues—is politically desirable but virtually impossible to achieve without the agreement of those who benefit precisely from this veto. This institutional vicious cycle is one of the most profound obstacles to a truly effective sanctions policy.

The unanimity rule for sanctions is a strategic aberration. It was designed to protect the sovereignty of member states on matters of national survival. It is being used to protect oil interests. That was not the intention of the treaties. But that is the reality.

What This Package Actually Changes

In this context, what does the 21st sanctions package actually change compared to previous ones? According to available information, it strengthens restrictions on maritime oil shipments, improves monitoring of the “ghost fleet,” and expands the designation lists to include new intermediaries involved in circumvention. It maintains and extends the overall sanctions framework through 2027. These measures represent real progress—every loophole closed in the sanctions regime is helpful.

But it does not address the Druzhba pipeline. The exemptions for Hungary and Slovakia have been renewed—once again—without any commitment to a transition timeline. And there are no secondary sanctions targeting the third-party intermediaries most active in circumvention. These are the two most glaring omissions, and the Baltic states made this point very clear during the negotiations.

The Baltic verdict: insufficient but better than nothing

The Baltic governments will likely respond to the 21st package with a nuanced reaction: they will acknowledge its progress without hiding their frustration over its shortcomings. This stance—support for the EU in principle, coupled with specific criticism of its shortcomings—is the one they have adopted since 2022. It is politically prudent: there is no point in alienating allies who are, after all, making progress—even if it is insufficient. But it cannot mask the reality: as long as Druzhba is flowing, the embargo is incomplete and funding for the Russian war has not been cut off.

Sanctions are an imperfect, slow, and frustrating tool. But they work—slowly, imperceptibly, inevitably. Anyone expecting a spectacular collapse is using the wrong metric. We must measure the accumulation, not the explosion.

The Oil Pipeline as a Lifeline

A total embargo on Russian oil—including the closure of the Druzhba pipeline—would deprive Moscow of a significant portion of its foreign exchange earnings. According to analyses by the Kiel Institute and CREA, a full European embargo could reduce Russian oil revenues by an additional 15 to 25 percent. Given a budget deficit already exceeding $80 billion, this would place considerable economic pressure on Moscow.

Russia was already selling its oil to China and India at significant discounts—sometimes as much as $15 to $20 per barrel below the world price. A European embargo would force the Kremlin to sell its crude oil at even lower prices to these captive buyers, thereby reducing its profit margins and tax revenues. The math is unforgiving.

The Cost of Inaction Versus the Cost of an Embargo

Some economists have attempted to quantify the cost of a total oil embargo for European economies: several billion euros in transition costs, a temporary disruption of energy markets, and a moderate impact on growth in the most dependent countries. These figures are real. But they must be weighed against the cost of inaction: every additional year of war destroys tens of billions of euros worth of Ukrainian infrastructure and perpetuates strategic insecurity for the entire European continent.

The most relevant comparison is with the 2022 gas crisis: Europe managed to break its dependence on Russian gas in less than a year, at the cost of painful but manageable inflation. This transition demonstrated that Europe can show remarkable adaptability when the political will is there. When it comes to oil via the Druzhba pipeline, that political will is still lacking. It is not impossible to build.

The debate over the cost of the embargo sometimes exasperates me because of its asymmetry. We precisely quantify the transition costs for Hungarian refineries. We never quantify the costs of the war’s continuation for Ukrainian families. This analytical asymmetry reflects an implicit moral hierarchy that I refuse to accept.

Hundreds of Tankers Off the Radar

Since 2022, Russia has built up a “ghost fleet” of tankers: ships flying flags of convenience, without recognized insurance, operating outside standard AIS tracking systems, and whose actual owners are hidden behind opaque corporate structures. These ships transport Russian oil to buyers who are unwilling or no longer able to purchase directly from Russia, thereby circumventing the G7 price cap.

The European Commission and its partners have attempted, through successive rounds of sanctions, to target this fleet. But each new designation is followed by a resurgence: new ships are registered under opaque flags faster than they can be identified and sanctioned. It is a regulatory cat-and-mouse game in which Russia, for now, holds the upper hand.

The Role of Third Countries in This Shadow Trade

Countries such as the Marshall Islands, Palau, Gabon, and other states with lax ship registration systems serve as flags of convenience for the Russian ghost fleet. These states lack the resources—or, in some cases, the will—to monitor the activities of vessels registered under their flags. International pressure to strengthen these registration systems is needed.

Without robust secondary sanctions mechanisms targeting insurers, shipping brokers, and flag-of-convenience states that facilitate this trade, the ghost fleet will continue to thrive. This is one of the most glaring loopholes in the current sanctions regime—and it is a loophole that the 21st sanctions package has not yet fully closed.

The Russian ghost fleet is state-level industrial-scale smuggling. Hundreds of ships, thousands of voyages, billions of dollars’ worth of sanctioned oil evaded. This is not a marginal issue—it is systemic. And the failure to respond adequately to it is one of the greatest shortcomings of the economic pressure campaign against Moscow.

5% of GDP: An Ambitious and Necessary Goal

The NATO Summit scheduled for July 7–8, 2026, in Ankara is expected to formalize a collective defense spending target of 5% of GDP for Alliance members. This represents a significant increase from the previous target of 2%—a target that most European members have rarely met. This ambitious target is a direct response to Russian threats and U.S. signals regarding the need to share the burden of collective defense more equitably.

For Ukraine, the Ankara summit is crucial: it is expected to send a clear signal regarding the prospects for NATO membership. Kyiv hopes to secure, at a minimum, a formal invitation or a credible timeline for its accession. The persistent hesitations of certain members—notably the United States under Trump—regarding Ukraine’s accession are being followed with anxiety by Zelensky and his diplomatic team.

Aligning Sanctions with Military Defense

One of the challenges of the Ankara summit is to maintain consistency between collective military defense efforts and economic sanctions policy. These two dimensions are complementary and not interchangeable: imposing economic sanctions on Russia without defending oneself militarily leaves an open vulnerability; defending oneself militarily without maintaining economic pressure allows Russia to finance its military through oil revenues.

NATO, which has committed to spending 5% of GDP on defense, is sending the right signal. But if, at the same time, certain alliance members continue to purchase Russian oil via the Druzhba pipeline, the strategic coherence of that signal is compromised. Defense policy and sanctions policy must speak with one voice. Ankara is a test of this.

I await the Ankara summit with a mixture of hope and skepticism. Hope that serious commitments will be made regarding Ukraine’s accession and defense spending. Skepticism that these commitments will remain mere political declarations without a timeline or implementation mechanism. The history of NATO summits on Ukraine justifies this skepticism.

The Urgent Matter That Can’t Wait

This investigation sought to answer a simple question: Why hasn’t Europe yet shut off the last major source of funding for Russia’s war chest? The answer is not technical—solutions exist, alternatives are available, and the costs are affordable. The answer is political: certain governments have chosen to maintain dependencies that they could have eliminated, for short-term economic reasons that do not stand up to serious scrutiny in light of the human costs of war.

The Baltic states are right. Their demand is not radical—it is the logical consequence of a sanctions policy that aims to deprive Russia of the resources necessary for its war. As long as this logic is not fully applied, the sanctions policy will remain what it too often is: a political signal rather than genuine economic pressure. The final lock must be closed. The question is no longer why. It is when.

The Responsibility of Hesitant Capitals

History will record which countries delayed the total embargo and for what reasons. It will also record the human cost of this delay—the additional weeks of war, the Ukrainian cities under bombardment, the prisoners who will not return home. Budapest, Bratislava, and the capitals that cover up their hesitations will bear this responsibility. The time for backroom diplomacy and renewed exemptions is over: the time has come to make a choice. And the choice, morally and strategically, is clear.

Signed, Maxime Marquette, columnist

The numbers speak for themselves, but you have to know how to read them. Behind every economic figure, behind every statistic on sanctions or prisoners, there are real political decisions and concrete human lives that Excel spreadsheets can never fully capture.