The EU's ban on Russian oil is on hold as Hungary resists sanctions.
According to diplomats, 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.
Officials in Brussels are expected to draft a new compromise plan before calling another meeting of diplomats on Monday or Tuesday, after talks between the bloc's 27 countries broke down without a deal on Sunday.
Envoys have met several times to discuss the EU's sixth package of sanctions against Russia, but have yet to agree on 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 proposed measures — most notably, a complete ban on Russian crude and refined fuel imports — will be extremely difficult for some countries to accept. Shutting down the EU market for Russian fossil fuels is seen as a key strategy for denying Putin the funds he needs to fund his war in Ukraine.
According to the Centre for Research on Energy and Clean Air, the EU had imported about €44 billion in fossil fuels from Russia via shipments and pipelines since the invasion began on April 27.
Last week, Hungary and Slovakia, which are both heavily reliant on Russian oil, led the opposition to von der Leyen's plan and, along with the Czech Republic, won concessions from the Commission, allowing them more time to comply with the ban.
According to diplomats, Viktor Orbán's Hungarian government held up a deal once more on Sunday. He warned on Friday that the plan to phase out Russian oil would have a "nuclear bomb." effect on Hungary's economy.
An EU diplomat stated, "There is no compromise among member states. Hungary is still opposing [the package], and this is the problem."
After failing to reach an agreement on Friday, EU ambassadors met again on Sunday for a second round of talks, but they were over by early afternoon. EU diplomats had hoped to reach an agreement by Friday or at the very least over the weekend.
Russian crude oil would be phased out in six months and refined oil by the end of the year, according to the European Commission. The most recent plans, seen by POLITICO on Sunday, envision giving Hungary and Slovakia until the end of 2024 and the Czech Republic until the end of June 2024 before the oil embargo takes effect.
However, one EU diplomat claimed that the compromise did not go far enough for Hungary, who wants to be completely exempted from the oil embargo. Orbán previously stated that his country would require at least five years, citing the fact that Hungary is landlocked and thus more reliant on Russian oil than countries that can receive the resource through their ports.
The diplomat stated, "It’s impossible," "They want something like a total opt-out. But that's crazy."
Bulgaria is also unhappy with the text, according to a senior EU diplomat, and has requested a longer phase-out period.
The next meeting of EU ambassadors is expected to take place on Monday or Tuesday, with Russian President Vladimir Putin expected to announce his future plans on Monday.
They also downplayed the differences, claiming that only minor details remained to be worked out and that a deal on Tuesday was possible. The Hungarian embassy was unavailable for comment.
The planned oil embargo is not the only source of disagreement among EU member states. Other points of contention include whether EU ships should be prohibited from transporting Russian oil. This component of the package has been put on hold while G7 coordination is sought. The goal is to ensure that the sanctions are effective against Russia and that they are watertight, so that countries like China or Turkey do not benefit from a change in EU rules.
The difficulties are only likely to worsen as the EU tightens its sanctions against Russia for its invasion of Ukraine, particularly as attention turns to shutting down Russian gas supplies.
On Sunday, one of the diplomats said, "We have to be optimistic. I hope that maybe tomorrow or Tuesday the package will be adopted. Everybody needs fresh air during this sunny Sunday and then they can come back tomorrow."
By fLEXI tEAM