EU’s Russian oil ban stalls while Hungary maintains sanctions – POLITICO

European Union countries are struggling to agree on the details of a new package of Russia sanctions, including how a ban on Vladimir Putin’s oil industry would work, diplomats told POLITICO.

Talks between the bloc’s 27 countries collapsed on Sunday without an agreement, and officials in Brussels are now expected to draft a new compromise plan before convening another diplomatic meeting on Monday or Tuesday.

Envoys have met multiple times to discuss the EU’s sixth package of sanctions against Russia without signing the proposals, which were first publicly announced on May 4 by European Commission President Ursula von der Leyen.

The ongoing difficulties reflect the fact that the upcoming measures – most notably a complete ban on imports of Russian crude oil and refined fuels – will be deeply painful for some countries. Shutting down the EU market for Russian fossil fuels is seen as a crucial strategy to deny Putin the revenues that help fund his war in Ukraine.

As of April 27, the bloc had imported about $50 billion in fossil fuels from Russia through shipments and pipelines since the invasion began, the bloc said Center for Research on Energy and Clean Air.

Hungary and Slovakia – both heavily dependent on Russian oil – led objections to von der Leyen’s plan last week and joined the Czech Republic in winning concessions from the commission to give them more time to comply with the ban.

According to diplomats, it was again Viktor Orbán’s Hungarian government that blocked a deal on Sunday. On Friday he warned that the plan to exit Russian oil would destroy Hungary’s economy, likening the impact to a “nuclear bomb”.

“There is no compromise between member states,” said an EU diplomat. “Hungary is still against it [the package]And this is the problem.”

After failing to reach an agreement on Friday, EU ambassadors met for another round of negotiations on Sunday, but talks ended by early afternoon. EU diplomats had initially expected an agreement by Friday or at the latest by the weekend.

The European Commission proposes to phase out Russian crude oil within six months and refined oil by the end of the year. The latest plans, circulated on Sunday and seen by POLITICO, would give Hungary and Slovakia until the end of 2024 and the Czech Republic until the end of June this year before the oil embargo takes effect.

However, an EU diplomat said the compromise does not go far enough for Hungary, saying Budapest is pushing to be completely exempt from the oil ban. Orbán previously indicated that his country needs at least five years, noting that Hungary is a landlocked country and therefore more dependent on Russian oil than other countries that could get the resource through their ports.

“That’s impossible,” said the diplomat. “They want something like a total opt-out. But that’s crazy.”

Bulgaria is also dissatisfied with the text, a high-ranking EU diplomat told POLITICO and also called for a longer exit period.

Diplomats expect the next meeting of EU ambassadors to take place on Monday or Tuesday, with the Russian president expected to set out his further intentions on Monday.

They also downplayed the disagreements, saying only a few details remained to be negotiated and that an agreement on Tuesday was realistic. The Hungarian embassy could not be reached for comment.

The planned oil embargo is not the only point of contention between the EU countries. Other disagreements concern, for example, whether EU ships should be banned from transporting Russian oil. This part of the package has been put on hold awaiting some form of coordination at G7 level. The aim is to ensure that the measures are effectively anti-Russian and watertight, so countries like China or Turkey do not take advantage of a change in EU rules.

Difficulties are likely to worsen as the EU tightens sanctions against Russia’s invasion of Ukraine, particularly when it comes to cutting off Russian gas supplies.

“We have to be optimistic,” said one of the diplomats on Sunday. “I hope that the package will be passed maybe tomorrow or Tuesday. Everyone needs some fresh air on this sunny Sunday and then they can come back tomorrow.”

Barbara Moens, Suzanne Lynch, and David M. Herszenhorn contributed reporting. EU's Russian oil ban stalls while Hungary maintains sanctions - POLITICO

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