EU embargo on Russian oil: 27 negotiate key pipeline exemption for Hungary

The 27-member delegation yesterday considered a new proposal, which provides for the temporary exemption of a key oil pipeline for Hungary from the European Union’s progressive embargo on Russian oil, in order to lift the blockade of the 6th package of sanctions against Moscow, on the eve of Summit in Brussels.

The proposal, tabled by European institutions and France, which holds the rotating EU presidency this semester, calls for an embargo on Russian oil transported by sea by the end of the year, with the exception of “currently” transit through the Druzba pipeline, which supplies mainly Hungary, Slovakia and the Czech Republic, became known from sources close to the European Commission.

“The Druze issue will be raised again soon,” a European source said.

Hungary, a landlocked country that is 65 percent dependent on oil supplies from Russia via Druzhba, opposes the embargo on the pipeline and turned down the first offer to be excluded for two years. . Budapest has requested at least four years and European funding of almost 800m euros to adapt its refineries.

But with the Hungarian government’s pandemic recovery plan stalled in Brussels over its rule of law dispute with Budapest, it seems difficult to agree on European funding.

There was no agreement on the new proposal submitted to the ambassadors of the member states yesterday Sunday and a new meeting is scheduled this morning, before the start of the Summit, at 17:00 (Greek time), which is expected to end tomorrow morning Tuesday.

“This is a difficult and complicated discussion that takes time, we are trying to find a solution to allow the new sanctions to be adopted. We may not be able to reach an agreement” before the summit, a European official warned.

The exception mainly raises the issue of “equality” between Member States in terms of oil imports, which some have raised, according to the same source.

“I hope we can reach an agreement tomorrow (today), but I’m not sure it will depend on the leaders,” he said.

The unanimity of 27 is required for the adoption of the 6th package of sanctions in Russia.

“By targeting oil transported by sea, we are affecting at least two-thirds of Russian oil,” a European official said. EU sanctions are aimed at draining funding for Russia’s war on Ukraine.

For the EU, spending on oil imports ($ 80 billion) in 2021 was four times that on gas imports.

“If a” limited embargo, which excludes oil pipelines, is imposed, it will be much less painful for (President Vladimir Putin) Putin’s Russia, because finding new customers to be supplied with tankers is much less difficult, “said Thomas Pellen. of the Jacques Delors Institute.

“Pebble in the shoe”, “elephant in the room”: Europeans are worried that if no agreement is reached on the new sanctions, a heavy shadow will fall on the summit of heads of state and government and consultations have intensified in recent days.

Ukrainian President Volodymyr Zelensky is expected to intervene at the start of the summit via video link, as Kyiv intensifies pressure on the West to “kill Russian exports” more than three months after Russia’s invasion of Ukraine.

In addition to the oil embargo, the sanctions package also provides for the exclusion of Russia’s largest bank, Sberbank (37% of the market), and two other Russian banking institutions from the international SWIFT interbank data exchange system, and the addition of about sixty blacklisted individuals. of the EU.

The 27 are also expected to discuss liquidity in Kyiv to keep the Ukrainian economy afloat – the Commission proposed € 9 billion in aid in 2022 – as well as the issue of food insecurity due to the blockade of grain exports from Ukraine. , expressing fears that it will cause a crisis in Africa.

The agenda will also include the reconstruction of Ukraine, in which the EU wants to play a key role. Kyiv recently estimated that the damage caused by the destruction of roads and other infrastructure amounted to about $ 600 billion.