EU leaders meet in Brussels in the midst of impasse on Russian oil ban

EU leaders are flying to Brussels to meet in a two-day extraordinary summit centred on the Ukraine war, energy dependency and defence investments.

The agenda’s meeting, however, is set to be overshadowed by the protracted negotiations around a proposed EU-wide ban on Russian oil imports.

It’s been almost four weeks since Ursula von der Leyen, the president of the European Commission, unveiled a proposal to phase out all Russian oil products by the end of the year. 

The embargo was designed to target both seaborne and pipeline imports.

But soon after her announcement, several member states, including Hungary, Slovakia, the Czech Republic and Bulgaria, raised concerns and asked for tailor-made exceptions to have more time to adapt their refineries and cushion the economic impact.

Several rounds of intense negotiations have failed to deliver a breakthrough, with Hungary emerging as the main and most vocal opponent.

Prime Minister Viktor Orbán asked that the measure be removed from the summit’s agenda, but the issue will become impossible to avoid if no agreement has been reached by the time leaders sit around the table.

“Discussing the sanctions package at the level of leaders in the absence of a consensus would be counterproductive,” Orbán wrote in the letter addressed to European Council President Charles Michel. “It would only highlight our internal divisions without offering a realistic chance to resolve differences.”

Meanwhile, Ukraine’s patience is wearing thin with foreign affairs minister Dmytro Kuleba tweeting that the sixth package of EU sanctions “needs to be approved as soon as possible, oil embargo included”.

EU sanctions require the unanimity of all 27 member states.

Pipeline exemption

The latest draft being circulated among ambassadors indicates an important tweak could be introduced: a total exemption for pipeline oil.

Between 70 to 85% of Russian oil imported to the EU is shipped from ports, with the rest coming directly from the Druzhba pipeline, a massive conduit that feeds refineries in Poland, Hungary, Slovakia, the Czech Republic, Austria and Germany.

These refineries have for decades grown accustomed to the reliable and comparably cheap deliveries of a specific type of Russian oil. The sudden switch to other providers is expected to be highly costly and disruptive.

Hungary has argued the transition could cost nearly €800 million and take up to four years to complete.

The European Commission has unveiled a plan to move away from all Russian fossil fuels with a price tag of €210 billion, with €2 billion dedicated to revamping oil infrastructure.

Brussels says a combination of financial tools could help raise up to €300 billion by the end of the decade, although the money will be strictly linked to the EU’s recovery fund.

Hungary has not yet unlocked its share of the fund due to long-standing concerns related to the rule of law, which, in the Commission’s view, remain unaddressed. There is growing fear Hungary is capilisating on its veto to force the approval of its national recovery fund, diplomats told Euronews.

Before unveiling the oil ban, the Commission had been testing the waters with member states to see if there was enough political will to adopt the most radical and consequential measure against Moscow in retaliation for its brutal invasion of Ukraine.

But the executive’s behind-the-scenes work is now being put into question by the weeks-long impasse.

“We didn’t do our homework,” one diplomat told Euronews. “We acted under pressure from the Baltic states and Poland.”

Exempting pipeline oil while banning seaborne imports could trigger unfair competition across the single market, with some countries receiving reliable and affordable supplies while others struggle to secure more expensive barrels from non-Russian providers.

Speaking at the World Economic Forum last week, President von der Leyen told Euronews she hoped technical solutions to the oil embargo could be found “in a matter of weeks.”

“[Some countries] are landlocked so they cannot get the oil via the sea. They need alternatives and pipelines, and they need work on updating their refineries,” von der Leyen said. “It’s a complex mechanism.”

Food security in focus

The summit’s first day will begin on Monday at 4 PM (CET) and will focus on the Ukraine war and the country’s immediate financial needs.

Ukrainian President Volodymyr Zelenskyy has said the government needs over $7 billion (€6.5 billion) per month to pay for basic services and keep the economy afloat.

The EU is working on macro-financial assistance to provide loans worth €9 billion and is debating ideas on how to fund Ukraine’s post-war reconstruction, including through the confiscation of Russian-owned assets.

Confiscation, military support and financial aid will all feature prominently in Monday’s discussions. President Zelenskyy is expected to address leaders via video conference.

Tuesday’s session will see the intervention from another foreign representative: Senegalese President Macky Sall, who is the current chairperson of the African Union.

President Sall will bring the African perspective to discuss the exacerbating food crisis resulting from the war.

Ukraine is one world’s leading exporters of wheat, corn, barley and sunflower oil, but a Russian blockade of the Black Sea has prevented the country from exporting supplies to global markets.

Ukraine is storing around 40 million tonnes of grain, half of which must be exported by the end of July.

EU leaders will discuss how to make this possible by setting up alternative trade routes, an effort that will entail serious economic and security implications.

Russian President Vladimir Putin has said he is willing to help overcome the food crisis if the “politically motivated” sanctions imposed by the West are lifted. 

Ursula von der Leyen said talks to unblock the Black Sea are “ongoing” and accused Russia of being” responsible for the starvation of millions of people.”