Hungary continues to hold back EU efforts to phase out Russian oil

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BRUSSELS — The European Union has not finished talking about Russian oil. He’s not done buying it either.

During talks on Monday morning, EU ambassadors again failed to reach an agreement to phase out oil imports from Russia due to continued opposition from Hungary, keeping the issue on the EU agenda – and Russian oil flowing to Europe – for at least another day. .

The issue now threatens to eclipse a two-day European Council summit on the war in Ukraine starting Monday afternoon in Brussels, where European leaders will discuss a watered-down plan that would ban deliveries by sea but exempt oil by pipeline.

A senior EU official, speaking on condition of anonymity to brief the press, said the European Council hopes to reach a political agreement on the revised proposal on Monday. It is not yet clear whether the 27 leaders will sign.

Arriving at the summit, Hungarian Prime Minister Victor Orban said he had seen the revised proposal and there was still no agreement on it. He welcomed the decision to exempt oil from the pipeline – a Hungarian request to begin with – but also said he also needed guarantees that his country’s Russian oil supply would be protected if anything. something was happening to the pipeline that crosses Ukraine to Hungary.

European Commission President Ursula von der Leyen said on Monday there would eventually be a deal. “I don’t expect this to be resolved in the next 48 hours,” she told reporters upon arriving at the summit in Brussels.

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On May 30, the European Union again failed to reach an agreement to phase out oil imports from Russia due to continued opposition from Hungary. (Video: Reuters)

As the summit got underway, EU leaders listened to a virtual closed-door address by Ukrainian President Volodymyr Zelensky. European Council President Charles Michel thanked Zelensky for his “sincere” remarks. “We will increase your liquidity and help you rebuild Ukraine,” he tweeted. “We will continue to build your ability to defend your people and your country.”

While EU officials and leaders want the focus to remain on EU support for Ukraine, they will not be able to escape the fact that Europe continues to buy large quantities of Russian oil, which allows the money to flow to the Kremlin.

Ever since Russia’s full-scale invasion of Ukraine, member states have been trying to find ways to wean off Russian fossil fuels while still getting enough power to keep the lights on across Europe. They agreed to phase out coal, but oil talks have been more difficult and have now been stalled for weeks by Orban.

Orban likened an EU oil ban to dropping a “nuclear bomb” on his country’s economy and urged more time and money to upgrade his landlocked country’s oil infrastructure. Although there was a push to give concessions to Hungary and other countries that are heavily dependent on the Russian pipeline, the Hungarian leader won extensions but continues to push for more, according to EU officials and diplomats.

Some are expressing concern that Orban – one of Russian President Vladimir Putin’s closest allies in Europe – appears to be using the situation to hit back at EU officials for withholding economic stimulus money from the EU. Hungary and threatened to withhold billions in democratic backsliding grants.

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The latest proposal on the table calls for a ban on deliveries by sea, but exempts deliveries by pipeline for now, which keeps oil from Russia going to several EU countries, including Hungary, according to a draft proposal obtained by The Washington Post. The draft does not set a timetable for the exemption.

Exempting pipeline oil would mitigate the impact of oil measures. An EU official, who spoke on condition of anonymity to brief the press, said phasing out all sea deliveries would affect around two-thirds of imports.

The pipeline oil exemption allows continued supplies via the Druzhba network, which crosses Belarus to Poland and Germany, and via Ukraine to Slovakia, the Czech Republic and Hungary. Given that Poland and Germany have already pledged to wean off Russian oil this year, the bloc could theoretically cut even further.

However, there is no doubt that the compromise – and the message it sends – is a boon for Russia, many of whom in Brussels are wondering what went wrong.

Many EU officials and diplomats have tried to downplay Hungary’s role, portraying the challenges as technical, not political.

A senior EU diplomat, speaking on condition of anonymity to discuss sensitive issues, said that, in an effort to act quickly, EU officials and diplomats had not considered any pretty close to what an oil would mean for member states that get most or all of their oil from Russia.

“Under the pressure of this war, we took action too soon and we are now suffering the consequences,” the senior diplomat said.

Others see the issue as inherently political – and all about Orban. “Every time something is conceded to Hungary, they ask for something more,” said another EU diplomat, speaking on condition of anonymity to discuss the ongoing negotiations.

“Let’s see what happens with Orban tonight,” the diplomat continued. “He’s the one taking the lead.”

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