European Union nations failed to agree on a deal Sunday on a revised package of sanctions over Moscow’s invasion of Ukraine ahead of a leaders’ summit in Brussels but talks will continue during the week.
Hungary is so far refusing to back a compromise despite proposals aimed at ensuring its Russian oil supplies, according to people familiar with the talks. EU ambassadors are scheduled to meet again Monday morning, but the lack of a deal means that sanctions could be a prime topic at the bloc’s two-day meeting starting Monday. An EU official said a deal is still possible in the coming days.
The European Commission, the EU’s executive arm, circulated a proposal over the weekend that would ban seaborne oil from Russia by early next year while delaying restrictions on imports through the giant Druzhba pipeline, which is Hungary’s main source of crude imports, said the people who asked not to be identified because the negotiations are private.
Hungary had previously suggested that an exemption to pipeline deliveries would secure its support. Two of the people said Budapest is now demanding further concessions.
EU sanctions require the backing of all member states. Several nations had previously opposed distinguishing between seaborne and pipeline deliveries over a concern that such a split was unfair as it would disproportionately hit their supplies, the people said. Others were worried that the proposed compromises would soften the package too much.
A measure to ban Russians from purchasing real estate in the EU was dropped from the latest version of the text following pressure from Cyprus, according to the people. Haggling over the terms of the EU’s oil embargo has also led other member states to seek exemptions to the proposed package.
If the EU can’t get Hungary on board with the sanctions plan, it would be a significant blow to the bloc’s united stand against Russia and an embarrassment to the European Commission, which announced the oil embargo plan several weeks ago.
The entry into force of a provision to ban providing insurance related to shipping oil to third countries was pushed back to six months from the adoption of the sanctions package, from the previous three-month transition, the people said.
The EU’s efforts to limit price spikes and Russia’s ability to divert its oil exports in the event of a European embargo had already been watered down in earlier negotiation rounds after a plan to ban tankers from transporting oil to third countries was abandoned.
An embargo on seaborne imports would be phased in over six months for crude and eight months for refined petroleum products.
Russia shipped about 720,000 barrels a day of crude to European refineries through its main pipeline to the region last year. That compares with seaborne volumes of 1.57 million barrels a day from its Baltic, Black Sea and Arctic ports.
However, the bulk of the pipeline deliveries are to Germany and Poland, which have signaled they will wean themselves off Russian supplies regardless of any EU action.
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