The ongoing dispute over plans for a European oil embargo once morest Russia threatens to overshadow the EU summit in Brussels that begins this Monday. According to information from the German Press Agency, the government of Hungarian Prime Minister Viktor Orban prevented agreement on a new compromise proposal on Sunday by making its approval dependent on financial commitments from the EU. In addition, countries such as the Netherlands also expressed reservations.
In order to solve the blockade in Hungary, which has been going on for weeks, the EU Commission had previously proposed only allowing imports of oil transported by ship to be phased out for the time being. Hungary, which is heavily dependent on Russian energy sources, might continue to obtain oil from Russia via the huge Druzhba pipeline. Refineries in Slovakia and the Czech Republic as well as in Poland and eastern Germany are also connected to the pipeline. However, Germany and Poland have already made it clear that they want to become independent of Russian oil supplies by the end of this year, regardless of an embargo. Before then, the oil embargo shouldn’t be fully in place anyway.
According to information from EU circles, the financial commitments now being demanded from Hungary are primarily regarding funds that the country wants for the medium-term conversion of its oil infrastructure. The government in Budapest estimates the costs for the necessary conversion of refineries to non-Russian oil at up to 550 million euros. In addition, according to the information, 200 million euros must be invested in order to supply the country in the future via a pipeline starting on the Adriatic coast.
According to diplomats, however, the Netherlands have substantive problems with the compromise proposal. They fear that there might be an unlevel playing field in the EU if some states continue to purchase relatively cheap pipeline oil from Russia. This is also relevant because the port of Rotterdam has so far been an important transhipment point for Russian oil and business might initially collapse there as a result of the embargo.
The EU Commission’s original proposal was to completely end imports of Russian crude oil in six months and oil products in eight months because of the Ukraine war. Only Hungary and Slovakia should be given 20 months.
According to EU diplomats at the EU consultations on Sunday, Germany was basically ready to agree to the Commission’s compromise proposal. At the same time, the federal government made it clear that the exemptions are actually not in their interest. According to the information, it was also noted with displeasure that the Commission withdrew the proposal to ban Russians from buying real estate in the EU as part of the sixth sanctions package.
The official agenda of the two-day EU special summit in Brussels includes possible measures once morest the currently very high energy prices, further support for Ukraine and EU cooperation in the field of security and defense. According to the plans, there will be a briefing by Ukrainian President Volodymyr Zelenskyy on the current situation in Ukraine. This should be connected via video conference.