July 2, 2022
  • July 2, 2022

EU seeks to break deadlock over Russian oil ban ahead of summit

By on May 29, 2022 0

Ambassadors from the 27 member states of the European Union discussed on Sunday a compromise that could allow them to break the deadlock over a Russian oil embargo before an emergency summit in Brussels this week.

Bloc officials fear the lack of agreement could cast a shadow over the two-day meeting starting Monday between EU leaders.

Ukrainian President Volodymyr Zelenskyy will address the rally via video link to urge the bloc to “kill Russian exports” three months after the invasion of Ukraine.

The latest round of sanctions proposed by the EU has been blocked by landlocked Hungary, which does not have access to oil cargo ships.

Hungary depends for 65% of its oil needs on Russian crude supplied via the Druzhba pipeline, which connects Russia to various points in Eastern and Central Europe.

Budapest has dismissed as inadequate a proposal giving it two years longer than other EU states to wean itself off Russian oil.

It wants at least four years and at least $860 million in European funds to adapt its refineries to process non-Russian crude and increase pipeline capacity to neighboring Croatia.

Slovakia and the Czech Republic, also supplied by the Druzhba gas pipeline, agreed to two-and-a-half-year waivers, diplomatic sources said.

The compromise solution proposed to national negotiators on Sunday is to exclude the Druzhba pipeline from a future oil embargo and to impose sanctions only on oil transported to the EU by tanker, European sources said.

The Druzhba pipeline accounts for a third of all EU oil supplies from Russia. Maritime cargo represents the remaining two-thirds.

The compromise was tabled by France, which currently holds the rotating EU presidency, and by the European Council, which represents the governments of EU countries.

Its aim is to break a stalemate that since early May has prevented the EU from imposing a sixth round of sanctions on Moscow for its war in Ukraine.

This embargo on deliveries by sea would imply the cessation of purchases of petroleum within six months and of petroleum products by the end of the year.

It would also impose additional sanctions on Russian banks and expand the list of Russian individuals blacklisted by the bloc.

Another option being considered would be to postpone all new sanctions until a solution can be found to provide Hungary with alternative oil supplies, the sources said.

“A limited embargo that excludes pipelines will be much less painful for Putin’s Russia, because finding new customers for oil supply from tankers is much less difficult,” said Thomas Pellerin-Carlin of the think tank. Jacques Delors Institute.

The EU wants to cut funding for the Kremlin’s war effort. Last year, Russia’s oil import bill was $86 billion, four times that of natural gas.

If EU ambassadors manage to reach a compromise on an oil embargo on Sunday, it will still have to be approved by their governments before it can be presented to the summit.