The EU, breaking a stalemate, in an agreement to cut most of Russia’s oil imports

  • Bloc agrees to cut Russian oil imports by 90% by the end of the year
  • Hungary will benefit from an exemption for oil by pipeline
  • Zelinskiy criticizes the EU for its dependence on Russia

BRUSSELS, May 30 (Reuters) – European Union leaders agreed on Monday in principle to cut Russian oil imports by 90% by the end of the year, resolving a standoff with Hungary over the harshest sanction ever imposed by the bloc on Moscow since invading Ukraine three months ago.

Diplomats said the deal would pave the way for other elements of a sixth set of EU sanctions against Russia to come into force, including the removal of Russia’s largest bank, Sberbank (SBMX. MM), of the SWIFT messaging system.

“Agreement to ban the export of Russian oil to the EU,” European Council President Charles Michel said in a tweet at the end of the first day of a two-day summit of the bloc’s 27 leaders.

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“This immediately covers over 2/3 of oil imports from Russia, cutting off a huge source of funding for its war machine. Maximum pressure on Russia to end the war,” he said .

Two thirds of the Russian oil imported by the EU transits by tanker and a third by the Druzhba pipeline. The embargo on oil imports by sea would therefore apply to 2/3 of the oil imported from Russia.

The embargo would encompass 90% of all imports from Russia once Poland and Germany, which are also connected to the pipeline, stop buying it by the end of the year.

The remaining 10% will be temporarily exempted from the embargo so that landlocked Hungary, which was the main obstacle to a deal, as well as Slovakia and the Czech Republic, which are all connected to the southern branch of the pipeline, will have access. ‘she can’t easily replace.

Budapest also appears to have obtained assurances from other leaders that emergency measures would apply “in the event of a sudden interruption of supply” following concerns raised by Prime Minister Viktor Orban about the risks posed to the Russian pipeline that crosses Ukraine to Hungary.

The ban on oil imports to EU countries will apply to Russian crude which is delivered by shipments.

It was not immediately clear how member states that receive oil from tankers would be compensated for the higher cost compared to those that will keep the pipelines open.

ZELINSKIY TAKES OVER EU LEADERS

Earlier, Ukrainian President Volodymyr Zelenskiy chastised EU leaders in a video address for being too soft on Moscow as an oil embargo deal still seemed elusive.

“Why are you dependent on Russia, on its pressure, and not the other way around? Russia must be dependent on you. Why can Russia still earn almost a billion euros a day by selling oil? ‘energy ?” Zelensky said.

The EU has rolled out five rounds of sanctions since Russia invaded Ukraine in February, with unusual speed and unity given the complexity of the measures.

But the haggling over an oil import ban has revealed a struggle to expand sanctions as the economic risk to Europe grows because so many countries depend on Russian crude.

Dutch Prime Minister Mark Rutte said as he left the talks in Brussels that he was surprised by the turn of events.

“In the early evening I had no hope at all, but by around 11 p.m. it was done,” he said, adding that the technical details still pending shouldn’t be difficult.

The summit also gave political backing to a package of EU loans worth 9 billion euros ($9.7 billion), with a small grant component to cover part of the interest, to that Ukraine maintain its government and pay salaries for about two months.

The leaders also backed the creation of an international fund to rebuild Ukraine after the war, with details to be decided later.

On Tuesday, leaders will pledge to speed up work to help Ukraine transport its grain out of the country to global buyers by rail and truck, as the Russian navy is blocking usual shipping routes, and to take steps to become more rapidly independent of Russian energy.

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Editing by Leslie Adler

Our standards: The Thomson Reuters Trust Principles.

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