EU presses for watered-down oil embargo against Russia

BRUSSELS • European Union leaders were hoping yesterday to persuade Hungarian Prime Minister Viktor Orban to back a watered-down oil embargo against Russia after a month of haggling over a blocked sanctions package.

But Mr Orban, who has demanded an exemption from the ban and guarantees for his country's energy supply, warned on arrival at the EU summit that no compromise had yet been reached.

He confirmed that the proposal on the table would see Russian oil arriving in the EU by pipeline, rather than by sea, exempted from the sanctions.

"For Hungary this is a good solution, it means that an atomic bomb won't be thrown on the Hungarian economy," he said.

But he warned that this would not be enough to guarantee supply.

"What causes us a problem is in the case that something happens to the pipeline carrying Russian oil, which is something that the Ukrainians and others have spoken about," he said. "If Russian oil does not arrive by pipeline, then we would have the right to receive oil by sea, and have it arrive from elsewhere."

A sixth wave of EU measures against Moscow was put on the table weeks ago, but has been rejected by Mr Orban and resisted by neighbouring countries also reliant on pipelined Russia oil.

French President Emmanuel Macron cautiously told reporters that a deal long sought after was "getting closer", but others doubted that.

"I don't think we'll reach an agreement today," Estonian Prime Minister Kaja Kallas said at a political meeting yesterday ahead of the summit. She did not expect a solution before a summit late next month.

EU sanctions require the backing of all 27 member states and ambassadors fell short of finalising a deal just hours before the start of the summit.

The EU will eventually reach agreement over an oil embargo against Russia, Luxembourg's Prime Minister Xavier Bettel said. "We will always find a compromise. There are still talks going on. As long as there are talks, I am hopeful," he told reporters as he arrived for the summit.

According to a new draft of the summit conclusions, the member nations will agree that Russian oil imports into EU countries will be banned, though with a temporary exemption for crude delivered by pipeline.

The text seen by Reuters - which may still be revised again - would confirm an agreement on seaborne oil sanctions, with pipeline oil supplied to landlocked Hungary, Slovakia and the Czech Republic to be sanctioned at some later point.

However, the leaders gathering in Brussels yesterday afternoon would not finalise the terms for that temporary exception, the text suggested. Instead, they were to ask diplomats and ministers to find a solution that would also ensure fair competition between those still getting Russian oil and those cut off.

An agreement in principle on the oil ban could help unlock the rest of a sixth package of EU sanctions, including cutting Russia's biggest bank, Sberbank, from the Swift messaging system, banning Russian broadcasters from the EU and adding more people to a list whose assets are frozen.

One tangible outcome of the summit will be agreement on a package of EU loans worth €9 billion (S$13.3 billion). A decision on how to raise the money will be made later.

AGENCE FRANCE-PRESSE, REUTERS