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European diplomats were pushing for a deal on stopping Russian oil imports on Monday, with leaders poised to back down to Hungary in a stand-off over sanctions when they assemble for a two-day summit on the fallout of the war in Ukraine.
A proposal circulated among European Union diplomats would see the 4,000-kilometre Druzhba oil pipeline, which supplies countries including landlocked Hungary, exempted from a ban on Russian crude imports.
The concession was offered after Hungary’s Prime Minister Viktor Orban refused to support a blanket oil ban and said the effect of such an embargo would be like dropping a nuclear bomb on his country.
Ambassadors from the EU’s 27 member states remained unable to strike a deal on the eve of the leaders’ summit in Brussels, leaving the bloc’s sixth sanctions package in limbo almost a month after it was proposed.
The talks resumed early on Monday in a last-ditch push for a deal before leaders arrived. EU foreign policy chief Josep Borrell told French television the discussions had been tough but that “in the end, there will be an agreement”.
Leaders are under pressure to free their economies from Russian fossil fuels in order to stop financing the invasion of Ukraine. They will discuss proposals in Brussels for a wider revamp of EU power grids.
Oil prices rose to two-month highs on Monday as traders waited for a decision. Brent crude futures were up 0.4 per cent at $119.89 a barrel.
Mr Orban suggested in a letter ahead of the summit that EU presidents and prime ministers avoid discussing oil sanctions altogether this week and leave the subject to technical negotiations among diplomats.
Germany, which supports the oil ban after initially opposing it, has sided with Mr Orban in arguing that the European Council summit should show unity rather than being overtaken by squabbling about energy.
But Mr Borrell said he hoped diplomats would strike a deal that could be presented to EU heads of state and government on Monday afternoon.
Slovakia and the Czech Republic, also landlocked, have asked for grace periods to impose any oil embargo but have not taken Mr Orban’s outspoken tone against the package.
A final sanctions package must be approved by all 27 member states. Countries such as Hungary can receive special treatment if other nations are willing to go along with it.
A German government source said it was hard to imagine Hungary being completely exempted from an oil ban, but Mr Orban’s government has sought to work around it by focusing the embargo on sea trade instead of pipelines.
Hungary gets about 65 per cent of its oil from Russia, and European refineries set up to handle Russian crude cannot be converted overnight. The Druzhba pipeline serves Poland, Germany, Hungary and Slovakia among others.
The EU agreed a ban on Russian coal in the fifth round of sanctions. A possible gas embargo sought by Ukraine and some member states has not yet been proposed.
Russia has demanded that the sanctions be lifted in exchange for unblocking food exports to ease an emerging global hunger crisis, a ploy described as blackmail by Ukraine.
